BlackRock CEO Links Rising Crypto and Gold Demand to Investor Fear
BlackRock CEO Larry Fink said more people are buying crypto and gold. He attributes this to fear caused by rising government debts. The comments came during an interview at the Future Investment Initiative conference in Riyadh, Saudi Arabia.
Fink described crypto and gold as “assets of fear.” He said, “You own these assets because you’re frightened of the debasement of your assets. You’re worried about your financial security. You’re worried about your physical security,” according to Bloomberg.
Inflation Sparks Shift Toward Hard Assets
Investors are increasingly turning to what experts call the “debasement trade.” They move away from government-issued money and buy hard assets like gold, silver, and Bitcoin.
Fabian Dori, Chief Investment Officer at Sygnum Bank, said this trend stems from weakening purchasing power caused by loose fiscal and monetary policies. He added, “There are good reasons why private investors, banks, and institutions may start to hedge using Bitcoin.”
Dori warned that Bitcoin’s price is volatile and requires robust risk management and continuous monitoring.
Rising Global Debt Fuels Investor Anxiety
Data from the International Monetary Fund shows U.S. government debt will reach 143.4% of GDP by 2030. This level surpasses debt ratios currently seen in Italy and Greece.
The IMF also projects that the U.S. will run a yearly budget deficit above 7% of GDP until 2030. These figures have caused investor concern, prompting many to seek protection against inflation and currency weakness.
Bitcoin recently hit a record high above $126,000 before falling after former President Donald Trump threatened 100% tariffs on China. The resulting crash wiped out about $19 billion in leveraged crypto futures. Bitcoin briefly dropped below $110,000 but currently trades around $115,162, according to CoinMarketCap.
Fink noted the U.S. still depends heavily on foreign buyers for its Treasury assets. He said, “We still are a nation that needs 30% to 35% of all our Treasury sales going overseas.” Despite this, many investors expect the U.S. to remain an attractive investment destination over the next 18 months.
