BlackRock’s Rick Rieder Predicts Bitcoin Price To Go Up Significantly
According to the managing director of BlackRock, the world’s largest asset manager, Bitcoin can go much higher in price.
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 something bitcoin traders are happy to hear, as the price is back down to the $45K levels.
Having said that, it doesn’t by any means make Rieder an all-out Bitcoin bull.
The BlackRock executive cautioned that the bitcoin price is very volatile and questioned the alternative asset thesis that bitcoin makes a good hedge.
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 correlation to equities, the correlation to risk assets. I’m not sure it’s a great hedge.
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.”
"Part of why I own a small piece of #bitcoin is I do think there are more people who are going to enter that fray over time … I like assets that are volatile that have upside convexity. I could see bitcoin go up significantly but I think it's volatile," @RickRieder#btc#cryptopic.twitter.com/nNxnhznrWe
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.”
He also explained 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.
BlackRock just last month invested $383 million USD in two bitcoin mining firms through its mutual funds and exchange-traded funds to support bitcoin exposure for its clients.
Taking into consideration, how BTC price has gone up, Rieder probably wishes BlackRock had made that move last November when he predicted that bitcoin will largely replace gold.
It’s been a rough week for bitcoin, with the 5-day Bitcoin price down over 11%, briefly dipping below $45,000 on liquid exchange markets Friday.
Coined as “Bitcoin Day” – 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.
