Since late last year, the price of bitcoin has dropped by roughly 70%, falling below $17,000 per bitcoin, driving down the price of ethereum, and igniting concerns that the entire cryptocurrency market may be “headed for oblivion.”
The CEO of BlackRock (BLK), the largest asset manager in the world with about $8 trillion in assets under management and a significant partnership with Coinbase earlier this year, has now predicted that blockchain technology will usher in “the next generation for markets” thanks to cryptocurrencies.
“I believe the next generation for markets, the next generation for securities, will be tokenization of securities,” said Larry Fink on New York Times Deal-book Summit this week.
Blockchain technology, which underpins bitcoin and other cryptocurrencies, enables traditional assets to be “tokenized” on a public ledger, possibly simplifying and lowering the cost of the transfer of investments like stocks, bonds, real estate, and alternative investments like fine art.
“I actually believe this technology is going to be very important,” Fink said. “Think about instantaneous settlement [of] bonds and stocks, no middlemen, we’re going to bring down fees even more dramatically. Think about it. It changes the whole ecosystem.”
Fink pointed to the defunct FTX cryptocurrency exchange as being at odds with the “whole foundation of what crypto is,” but he cautioned that many of today’s biggest cryptocurrencies and crypto companies won’t survive.
Due to FTX’s reliance on the FTT exchange cryptocurrency, which was used as loan collateral, the cryptocurrency’s implosion after a sharp decline in price was a contributing factor.
“I actually believe most of the companies are not going to be around,” Fink said. BlackRock indirectly invested around $24 million in FTX. However, it was not in the “core part” of BlackRock’s business, according to Fink.
