- BlackRock’s CEO still sees crypto assets as revolutionary, even though he disagrees with the issuance of tokens by centralized exchanges.
- The asset management firm’s CEO admitted the company had a $24 million investment in the now-collapsed FTX.
The collapse of FTX continued to be the talking point among major players in the digital asset industry. The founder of one of the biggest asset management firms, BlackRock, noted that the trigger for the FTX crash was due to the exchange creating its native token, FTT. According to BlackRock CEO Larry Fink, crypto exchange Sam Bankman-Fried’s decision to develop its governance coin led to the downfall of the FTX ecosystem.
Fink added that the entire FTX structure is centralized, which is at odds with the ethos of the larger cryptocurrency principle. Valued at $8 billion, BlackRock is among the fund managers in the crypto space with a good trading and investment history.
At the New York Times 2022 Dealbook Summit on November 30, Fink emphasized that cryptocurrency and its underlying blockchain technology remain revolutionary for the financial industry.
Although other centralized giants like Binance and Crypto.com account for more than $57 billion of the total net crypto market capitalization of $862 billion, the CEO revealed that he still needs to be convinced with their tokens. , BNB and Cronos, respectively.
Furthermore, he pointed out that the majority of centralized exchanges (CEX) would not be around for the long haul. In a separate interview with New York Times reporter Andrew Sorkin, the CEO revealed that while exchange-traded funds (ETFs) fueled the latest investment shift, he believes the next shift will be driven by tokenization.
“I am convinced that the next market evolution and the next change for securities products will be fueled by tokenization.” Furthermore, he highlighted some of the benefits of tokenization, insisting that this would be the reason for the sudden change in short-term investments, as traditional banks would no longer attract the value they currently attract.
BlackRock exposure to FTX
During the interview, the CEO of the asset management company admitted that the company had a $24 million investment in the now-collapsed FTX, which represents significant exposure. However, Fink declined to comment on speculation that BlackRock and other venture capitalists failed to conduct due diligence on FTX before investing.
Although it doesn’t seem to give in to FTX contagion like other hapless crypto exchanges, BlackRock’s FTX investment is seen by many as a poor investment decision. The company has been one of the most active investors in crypto since 2020. On November 3, reports indicated that BlackRock had become the new asset manager for the reserve fund of Circle, the stablecoin issuer of the world. ‘USDC.
Apart from that, on September 27, reports indicate that BlackRock launched an ETF to provide institutional investors with exposure to cryptocurrency through 35 different blockchain-based companies. With the FTX debacle, the fund manager is reportedly looking to expand its partnership and investment campaign to other established businesses in the crypto industry.
