• Despite touting crypto’s potential, Fink said he is “probably more in the Jamie Dimon camp” after JPMorgan Chase CEO called bitcoin worthless
  • Fink says he believes inflation is more than transitory

The CEO of BlackRock, the world’s largest asset manager, said that while he sees “huge opportunities” for digital currency, he is unsure how the crypto space will fare over the long term.  

“I’m not a student of bitcoin and where it’s going to go, so I can’t tell you whether it’s going to go to $80,000 or zero, but I do believe there’s a huge role for a digitized currency and I believe that’s going to help consumers worldwide,” Larry Fink, CEO, BlackRock, said in an interview on CNBC Wednesday morning. “Whether it’s bitcoin or something else or more of a governmental official digital dollar, that will play out.”

Though Fink said he is fascinated by interest in the space and that his firm is studying the blockchain and crypto sectors, he noted during the interview that he is “probably more in the Jamie Dimon camp.”

Dimon, the CEO of JPMorgan Chase, called bitcoin “worthless” on Monday during a virtual event held by the Institute of International Finance. 

“It makes no difference to me — I don’t think you should smoke cigarettes either,” Dimon added. “Our clients are adults. They disagree. That’s what makes markets.”

Dimon noted that though his company can’t custody it, it can give “as clean as possible” access to the asset class. JPMorgan reportedly told its advisors in a memo in July that they could begin buying and selling five crypto funds on behalf of a wealth management client.

Fink had said that month that the pension funds, insurance companies, and registered investment advisers BlackRock speaks to are not inquiring much about crypto.

A BlackRock spokesperson declined to comment about whether the firm has any product plans or other initiatives in the works related to crypto.  

Inflation not transitory, BlackRock CEO says

A day before Fink’s comments about crypto to CNBC, the CEO said at the Institute of International Finance event that he doesn’t believe inflation is transitory. 

Federal Reserve Chairman Jerome Powell has said repeatedly in recent months that inflation is elevated mainly due to transitory factors.

“I’m not calling for stagflation — I don’t see any evidence of that — but do I see persistence in inflation? Yes,” Fink explained. “I think it’s more than transitory related to supply-chain issues and commodity prices.”

Fink added that the Covid-19 economy accelerated the rise of the gig economy as workers are looking for more flexible working conditions with better pay and benefits. 

More than four million people left their jobs in August, according to the Department of Labor’s Job Openings and Labor Turnover Survey released Tuesday.

“I do believe the dominance of the gig economy is playing real havoc in how one thinks about jobs,” he said, and so all these issues mean to me the traditional economies are going to have to raise wages quite considerably.”

While crypto is viewed by many as a hedge against inflation, BlackRock executives did not mention crypto on its third-quarter earnings call on Wednesday morning. 

BlackRock President Rob Kapito said some clients are increasing allocations to various alternatives from 1% to up to 20%. Fink added that some are allocating more to equities and those in fixed income can move to lower-duration or inflation-protected products.

“I don’t think there’s one global trend of going in and out of one product because [there are] inflationary fears and some clients don’t believe in that,” Fink said. “Some people actually believe it’s transitory.”

A survey of fund managers representing about $400 billion in assets under management — published by CoinShares earlier this month — found that about 56% believe inflation is permanent, with 44% thinking it is transitory.

  • Ben Strack is a Denver-based reporter covering macro and crypto-native funds, financial advisors, structured products, and the integration of digital assets and decentralized finance (DeFi) into traditional finance. Prior to joining Blockworks, he covered the asset management industry for Fund Intelligence and was a reporter and editor for various local newspapers on Long Island. He graduated from the University of Maryland with a degree in journalism. Contact Ben via email at [email protected]