US risks losing the dollar's economic advantage due to bitcoin - BlackRock

BlackRock CEO Larry Fink, the world's largest asset manager, has warned that the US could lose the economic advantage of the dollar to bitcoin if it fails to control its national debt. This was reported by CoinDesk, writes UNN.

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BlackRock's iShares Bitcoin Trust currently holds nearly $50 billion in assets, and its tokenized BUIDL fund is on track to become the largest in the market. Its assets are expected to exceed $2 billion in April.

A big fan of digital assets, BlackRock CEO Larry Fink said he is not closing his eyes to the potential risks to the US from the growing popularity of Bitcoin (BTC).

The US has benefited from the dollar serving as the world's reserve currency for decades. But this is not guaranteed to last forever. If the US does not get its debt under control, if the deficit continues to grow, America risks losing this position to digital assets such as bitcoin.

"I am obviously not against digital assets. But two things can be true at the same time: decentralized finance is an extraordinary innovation. It makes markets faster, cheaper and more transparent. However, the same innovation could undermine America's economic advantage if investors start to see bitcoin as a safer bet than the dollar," he added.

Fink's letter comes at a time of high market uncertainty and anxiety among investors about the economic state of the US amid policy changes introduced by Trump. To balance the national deficit, Fink said, investors should diversify their portfolios to add private market assets in addition to stocks and bonds.

Fink also stressed that tokenized funds will be as well known among investors as exchange-traded funds (ETFs), provided the industry can create a better infrastructure for digital identities. This, he believes, is an obstacle to institutional investors fully embracing decentralized finance.

"Every share, every bond, every fund, every asset can be tokenized. This will revolutionize investing. If we are serious about building an efficient and accessible financial system, simply supporting tokenization will not be enough. We must also address the problem of digital verification," Fink wrote.

Earlier

UNN wrote that bitcoin is predicted to grow unprecedentedly.