BlackRock announced their plans this week to possibly invest in Bitcoin and become part of the cryptocurrency investment movement. As the company is one of the biggest asset managers in the United States, this announcement is considered a big move in the world of cryptocurrencies. Blackrock’s decision to invest in cryptocurrency came as a surprise, after Larry Fink, CEO of the company, referred to Bitcoin as an “index of money laundering” less than a year ago.
BlackRock’s Plans to Invest in Cryptocurrency
A spokeswoman from BlackRock reported that the investment giant has been looking at blockchain technology since 2015. They assembled a team from various departments to look into the opportunities presented by blockchain. The group was also asked to focus on cryptocurrencies and their potential in the future of finance.
One noteworthy member of this group is Terry Simpson, an investment strategist that manages multiple assets. According to new reports, BlackRock will start to place more focus on these investigations. Ultimately, the team will help BlackRock determine if cryptocurrency investment would be valuable to the company.
With BlackRock’s own assets worth over $6.3 trillion, it is no surprise that movements by the company often set new trends in the financial world. Their announcement regarding the possibility of cryptocurrency investment made quite an impact. In just one day, the price of Bitcoin increased by over 4%, and it is still rising.
The sources that provided additional details about BlackRock’s new decision have not made their names public. From their side, BlackRock didn’t provide additional information. The spokeswoman who delivered the statement rejected requests to further comment on the company’s plans.
An Unexpected Move from BlackRock
The reports regarding BlackRock’s possible investment in cryptocurrencies came as a surprise to many. Just a few months ago, the CEO of the company, Larry Fink, was asked to deliver his opinion on Blockchain. He responded by stating that cryptocurrency acted as a platform for money laundering. Jamie Dimon, Chairman and CEO of JPMorgan Chase, who accompanied Fink during his interview, went on to refer to those investing in Bitcoin as being “stupid.”
Fink’s opinions were not completely unfavorable, however. Even though the remarks from Fink were negative with regard to Bitcoin as a cryptocurrency, he did refer to blockchain as being a “real technology.” The positive comments from Fink at the time were focused on blockchain, the infrastructure behind cryptocurrencies.
Now we know that by the time the CEO of BlackRock made these statements, the company had already founded a team of employees to investigate the potential of blockchain and cryptocurrencies. Yet, on 16 July 2018, the company confirmed that they are now considering a movement into the “crypto market.” Their primary focus will be on Bitcoin.
Fink’s Opinion Shared By Others
Fink was not the first to voice his concerns about the future of Bitcoin and cryptocurrencies in general. Steven Mnuchin, the US Treasury Secretary, also shared his own concerns about Bitcoin earlier this year. Mnuchin explained that the regulations concerning the use of Bitcoin, and all other cryptocurrencies, should be similar to those of a regular bank account. Mnuchin’s primary concern at the time of the announcement was that these “digital currencies” offered the perfect platform for “dark trades” and money-laundering. These remarks were similar to those made by Fink in his interview.
While there are still concerns about illicit activities, Bitcoin continues to hold potential. The digital coin is expected to continue growing in the future. New cryptocurrencies are also likely to join the ranks of Bitcoin. With appropriate regulations in place, illicit activities can become less of a concern, giving the coins the opportunity to pave the way towards the future of financial management.