Larry Fink of Black Rock: Bitcoin is Attractive for Anonymous Users
Bitcoin remains speculative, believes Larry Fink, CEO of Black Rock.
Bitcoin thrives because of its anonymous nature, but otherwise remains a speculative asset, believes Larry Fink, CEO of investment firm Black Rock, reported Reuters.
"The reason why it does so well is it is anonymous. It’s anonymous, and it’s cross-border," said Fink.
Fink believes that Bitcoin may be legitimized and be turned into a system where the counterparties are known- but this would dispel users.
"If you legitimize it, you know who your counterparties are...the question is how many people will use it if you have to acknowledge you are a buyer or a seller."
At the moment, Bitcoin is not truly anonymous but pseudonymous, and some addresses are well-known, such as the recently watched Roger Ver wallets. Usually, users will generate new addresses for transactions, but given enough dedication, it is not impossible to track the movements of sums.
Fink believes Bitcoin is a financial instrument that is highly speculative and often used for money laundering.
Black Rock is a leading investment firm overseeing nearly $6 trillion in assets, revealing the size of mainstream investments compared to the $200 billion in digital assets.
"Bitcoin is tiny in the scheme of financial markets," said Fink.
Fink suggested millenials turn to the stock market- while recent research shows younger investors have a higher readiness for buying and holding Bitcoin.
At the moment, Bitcoin's wealth distribution is rather centralized, where a handful of addresses hold vast stashes of Bitcoin on the sidelines. Even at the peak days of trading, around 1 million Bitcoin changed hands. The larger holdings are rarely traded and some are kept in cold storage for the long term.
With this relatively small free float, Bitcoin is capable of more dramatic price moves.
The stock market has also been attractive in the past year, although its growth cannot be compared to the possibilities in the cryptocurrency market.
In the future, Bitcoin may attract mainstream investments through vehicles other than direct buying, such as dedicated funds, ETFs or the up and coming CME Group futures.