Summary:
Rick Rieder, the managing director of BlackRock, Inc., said in an interview on CNBC’s “Squawk Box” Thursday that he could see the Bitcoin price (BTC) “go up significantly.” That’s a welcome word for bitcoin traders this week, with the price back down to the K handle.
That doesn’t by any means make Mr. Rieder, the CIO for the world’s largest asset management company (with trillion in assets under management), an all-out Bitcoin bull.
He cautioned that the bitcoin price is very volatile and questioned the alternative asset thesis that bitcoin makes a good hedge.
Why The BlackRock CIO Is Long BTC
During the Squawk Box segment, Rieder said:
“First of all I’ll say on crypto— people describe it as a hedge or alternative. I’m not sure it’s a really great hedge. I mean the
Rick Rieder, the managing director of BlackRock, Inc., said in an interview on CNBC’s “Squawk Box” Thursday that he could see the Bitcoin price (BTC) “go up significantly.” That’s a welcome word for bitcoin traders this week, with the price back down to the $45K handle.
That doesn’t by any means make Mr. Rieder, the CIO for the world’s largest asset management company (with $9 trillion in assets under management), an all-out Bitcoin bull.
He cautioned that the bitcoin price is very volatile and questioned the alternative asset thesis that bitcoin makes a good hedge.
“First of all I’ll say on crypto— people describe it as a hedge or alternative. I’m not sure it’s a really great hedge. I mean the correlation to equities, the correlation to risk assets. I’m not sure it’s a great hedge.”
Adding:
“By the way— so when an asset moves ten to fifteen percent a day, it’s really hard to hedge big organic asset pools with that as a hedge.”
But Rieder’s still bullish Bitcoin and told viewers why he keeps a moderate long Bitcoin position in his portfolio:
“Listen, I’ve said… part of why I own a small piece of bitcoin is I do think there are more people that are going to enter that fray over time. We have a very moderate position in our portfolio. I like assets quite frankly that are volatile, that have upside convexity, and I could see bitcoin like it’s done. I could see it go up significantly.”
Rick Rieder, Source: CNBC
Rieder also clarified that he doesn’t believe Bitcoin is a “core asset” like fixed income (bonds) or equities (stocks). He just thinks the digital currency is still early along in its market adoption curve, appreciates the upside ahead for the Bitcoin price, and considers the volatility a plus for his purposes.
Last month, BlackRock invested $383 million USD in two bitcoin mining firms through its mutual funds and exchange-traded funds to support bitcoin exposure for its clients.
Give how the price of bitcoin has risen, Rieder probably wishes BlackRock had made that move last November when he predicted that bitcoin will largely replace gold.
Rough Week For Bitcoin’s Price
It’s been a rough week for bitcoin traders, with the 5-day Bitcoin price down over 11%, briefly dipping below $45,000 on liquid exchange markets Friday.
As it turned out, “Bitcoin Day” this week, the day the cryptocurrency was adopted as legal tender in El Salvador, saw the steepest bitcoin price capitulation since the rout after the all-time high levels in May. The coin’s worst day in four months saw some $330 billion USD wiped from its total market cap in under 24 hours.
