This year, to say that Bitcoin, Ethereum, and other large cryptocurrencies have dropped a lot is quite the understatement. This is fact even considering that Elon Musk helped one small cryptocurrency (unsurprisingly, Dogecoin) go up a lot.
Since the end of last year, the money needed to buy bitcoin has dropped by about 70%, to under $17,000 per bitcoin. This has caused the price of Ethereum to fall, and people are worried that the whole crypto industry could be “heading for disaster.”
Now, the CEO of BlackRock, the world’s largest asset manager with about $8 trillion in assets under management and a huge partnership with Coinbase earlier this year, has said that blockchain technology in crypto will bring about “the next generation of markets.”
The blockchain technology that Bitcoin and other cryptocurrencies use lets traditional assets be “tokenized” and recorded on a public ledger. This could make it easier to transfer stocks, bonds, real estate, and even art as investments.
“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.”
However, Fink warned that many of today’s biggest cryptocurrencies and crypto enterprises will fail, citing the failed FTX crypto exchange as contradicting the “whole core of what crypto is.”
After the price of FTT fell sharply, FTX went out of business because it was dependent on its FTT exchange cryptocurrency, which was used as loan collateral.
“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.
In September, BlackRock launched an exchange-traded fund (ETF) for blockchain businesses. This gave investors access to 35 different companies in the ecosystem.