Investors are turning to gold and cryptocurrencies due to concerns over capital preservation amidst rising global government debts, stated BlackRock CEO Larry Fink at a conference in Saudi Arabia.
“Cryptocurrencies and gold have become instruments of protection against fear. Investors fear the devaluation of traditional assets and worry about their financial and physical security,” he explained.
Since the beginning of the year, the price of the precious metal has increased by more than 50%. On October 17, it reached an all-time high of $4380 per ounce. Its current price has adjusted to around $3900.
For the first time in history, gold’s market capitalization rose to $30 trillion, surpassing the combined value of the world’s seven largest technology companies.
Bitcoin has not shown similarly strong dynamics, trading in the range of $108,000-$115,000 for most of October. However, experts anticipate the continuation of the bullish phase for the first cryptocurrency and the achievement of new highs.
As reported by Bloomberg, Fink’s comments coincided with the rapid rise of a strategy known as the “debasement trade”. In this strategy, investors are actively selling government bonds and popular fiat currencies, reallocating capital into gold, silver, and digital assets.
The CEO of BlackRock identified the United States as a priority investment direction. According to him, most international players view the American market as a key venue for capital allocation over the next year and a half.
However, the U.S. economy faces a significant challenge — the need for constant dollar sales to foreign investors.
“We are forced to place 30-35% of treasury bonds abroad — this is our Achilles’ heel,” noted Fink.
Any change in this process will trigger a chain reaction, he added. Therefore, the head of BlackRock believes that the U.S. should focus on attracting private investments.
Fink also commented on tokenization, which, he said, has increasingly interested central banks recently.
“Regulators worldwide are questioning the role of digitalization in the financial system. They are concerned about the pace of transformation, the implications for the dollar, and the future of payment systems,” he noted.
According to the BlackRock chief, the community underestimates the speed of upcoming changes. Instead of discussing AI, the focus should be on how quickly all assets will transition to digital form, Fink emphasized.
“This process is gaining momentum faster than many assume, but most countries are not ready for it,” the expert stated.
Fink has long been an advocate of digital assets and tokenization, which he previously compared to the transition from paper letters to email. According to him, the process will make investments more accessible, speed up transactions, and eliminate delays between purchases and settlements.
