Larry Fink, the CEO of BlackRock (BLK), went on Fox Business yesterday to talk about how bitcoin could “revolutionize finance” – a complete reversal of his 2017 statement that Bitcoin was an “index of money laundering.” Fink said that bitcoin is an “international asset not based on any one currency… that people can play as an alternative” in the context of discussion around inflation hedges and geopolitical risk hedges.
The Federal Reserve’s minutes released yesterday afternoon have been interpreted as hawkish, meaning that although job gains were robust and GDP was growing (albeit modestly) there were still too many jobs and too much inflation. This has caused many markets to go on a down trend.
The idea that bitcoin could act as an inflation hedge with absolute, provable scarcity has been pounded into the heads of people as a possibility by bitcoin acolytes. And the need to protect against geopolitical risk has come to the forefront with war raging in Ukraine. Neutral bitcoin could potentially help there as well.
Fink went on to say that “[Bitcoin] is a store of value, it could be a relevant part of the diversification of your portfolio.” This adds on yet another narrative to the “digital gold” narrative. Bitcoin is money without a nation.
BlackRock’s clients are getting skittish about the economy and are interested in protecting their money as we enter a period where the perpetual equities bull market might finally come to an abrupt halt as the macro environment deteriorates. And so too has the need to protect against geopolitical risk come to the forefront with war raging in Ukraine.
Evidently, enough clients have mentioned bitcoin to get BlackRock to take it seriously. The client is always right, and since clients seemingly want bitcoin, BlackRock is listening.