Bitcoin’s network effect has forced traditional financiers to change their minds about digital currency.
A senior executive at BlockRock, the world’s largest asset manager, admits that Bitcoin (BTC) has become a permanent fixture in the global financial system, offering another tangible sign that the narrative surrounding digital currency has changed.
Rick Rieder, CIO of BlackRock Fixed Income, told CNBC on Friday that „Bitcoin is here to stay.
While admitting that he is not a Bitcoin bull, Rieder said the flagship currency „will take the place of gold to a large extent [because] it is much more functional than passing a gold bar.
Bitcoin is sometimes referred to as „digital gold“ because of its unique value storage features. Bitcoin’s most ardent supporters believe that it will eventually take a considerable portion of the gold market capitalisation as more investors realise its usefulness.
Priced in gold, 1 Bitcoin is currently worth 9,961 ounces.
2020 could fall as the year in which the main Bitcoin cycle narratives changed, especially among institutional investors who have long been sceptical about digital currencies. Investors such as Paul Tudor Jones and Stanley Druckenmiller have supported Bitcoin, while major banks such as Citigroup and JPMorgan have issued positive guidance on the flagship cryptomoney.
On the commercial side, it is estimated that corporations hold 4.54% of Bitcoin’s total supply, which is equivalent to around USD 15.3 billion at current prices.
Meanwhile, BlackRock has indirect exposure to Bitcoin through its stake in MicroStrategy, a business intelligence firm that converted most of its cash reserves to BTC earlier this year.