BlackRock CEO Larry Fink has stated that investors are turning to gold and cryptocurrency out of fear that their assets are losing value, driven by growing concerns over global financial stability.
"Owning crypto assets or gold are assets of fear," Fink said at the Future Investment Initiative (FII) conference in Saudi Arabia, as reported by DWS News. He elaborated that individuals acquire these assets because they are "frightened of the debasement of your assets," indicating worries about both the financial and physical security of their holdings.
Fink’s remarks follow a recent downturn in gold prices, which fell below $4,000 on Monday after reaching all-time highs above $4,377 approximately a week prior, according to TradingView data.
US Dependency on Dollar Sales is a Major Concern
Fink identified the United States' reliance on selling dollars to international investors as a significant concern for the US economy.
"We still are a nation that needs 30% to 35% of all our Treasury sales going overseas, and, to me, that’s the biggest issue today," Fink stated during a panel discussion at FII. He warned that any shift in this dynamic would have a multiplier effect due to the dependence on selling dollar-based assets to foreign buyers, emphasizing the necessity of unlocking private capital.
During the event, Fink also addressed the primary concerns of global central banks, which have increasingly been acquiring gold, signaling a notable shift in global finance this year.
Central Banks Grapple with Tokenization and Digitization
Fink highlighted that a key question from central banks revolves around the evolving role of tokenization and digitization. He noted the numerous challenges central bankers face in navigating the emerging tokenization industry.
He pointed to critical questions such as the pace at which central banks should digitize their own currencies, the implications for the US dollar, and the impact on payment systems.
"I think we spend so much time talking about AI. We’re not spending enough time talking about how quickly we’re going to tokenize every financial asset," Fink commented. He added that this transition is expected to occur rapidly worldwide, and most countries are ill-prepared and underestimate the transformative impact of technology.
Fink’s insights on tokenization, cryptocurrency, and gold align with his long-held belief that all traditional financial assets are likely to be tokenized in the coming decades.
Beyond its position as the world's largest investment company, BlackRock is also one of the largest holders of Bitcoin (BTC), managing these holdings solely on behalf of its clients.
As of October 27, BlackRock's iShares Bitcoin Trust fund held 805,806 BTC, which is approximately 26% more than the entire BTC holdings of Strategy, the world's largest public holder of Bitcoin.