No doubt that bitcoin has made a serious mark on traders and financial experts everywhere. The fact is that bitcoin is no longer just a speculative asset, but rather a tool that can potentially hedge one’s wealth against inflation and other harsh economic circumstances.
Bitcoin Is Working Against Other Currencies
However, it looks like bitcoin is also having a negative effect on our financial environment. While it’s true that the cryptocurrency has made serious dents in portfolios and in traders’ minds, it’s also having a real impact on how the U.S. dollar and other forms of fiat function. Apparently, bitcoin is preventing these assets from doing their jobs according to Black Rock’s chief executive Larry Fink.
Fink made headlines last month when he commented that bitcoin was here to stay. Clearly, he’s growing on the asset, but he also believes that things are starting to work against traditional finance, which is still rather necessary. We’d all like bitcoin to have more of a place in the financial world, but traditional monetary systems still play huge roles, and if they’re moved around or played with too much, things can wind up in the doldrums.
In a recent interview, Fink explains:
Having a digital currency has real impact on the U.S. dollar. I’m not talking about for Americans. I’m talking about for international holders of dollar-based assets. Does [digital currency] change the need for the dollar as a reserve currency? If there was a true digital currency that was separated from dollar-based assets?
One of the big issues that bitcoin is presently facing is that too many people still have far too many fantasies about it. They’re not bothering to fully integrate it into financial systems. Very few companies accept bitcoin and crypto as a form of payment, for example. The fact is that bitcoin, while important and expanding on a regular basis, still makes up a small portion of today’s monetary environment.
Fink further states:
Can [bitcoin] evolve into a global market? Possibly. [Bitcoin is] still untested, a small market relative to other markets. You see these big giant moves every day. It’s a thin market.
A Hater to a Believer?
Still, Fink has come a long way in his belief in bitcoin, as prior to stating that the asset was likely to stick around for a while, he shared sentiment with the likes of JP Morgan chief Jamie Dimon, and ultimately referred to bitcoin as a simple “money laundering” tool.
It appears bitcoin has garnered a whole new reputation for itself this year given that it has gained the respect and attention of some of the world’s largest institutional investors such as MicroStrategy, Square and Stone Ridge, all of which have invested millions of dollars into the world’s number one digital currency by market cap.