BlackRock’s CIO for Fixed Income, Rick Rieder, has been very bullish on Bitcoin. BlackRock is the largest wealth manager in the world.
In CNBC’s Market Alert, Rieder emphasized the susceptibility of millennials to cryptocurrencies. Coincidentally, shortly thereafter, the price of BTC topped $ 18,800 for the first time since 2017.
Large financial institutions and executives in the traditional financial sector seem to be opening up to Bitcoin. While the institutions‘ direct impact on Bitcoin is unclear, the growing perception of BTC as a store of value is very optimistic.
Institutional investors and financial industry executives recognize Bitcoin
The price of Bitcoin is rising rapidly as a large amount of buyer demand accumulates with every major slump. In the past few weeks there has been significant selling pressure from Bitcoin whales, wealthy investors and buyers.
The internal chain data shows steadily increasing whale inflows to the exchanges, which indicates a high selling pressure on the part of the big BTC owners.
Still, any major decline that marked the short-term moving averages on the 4-hour and daily Bitcoin charts was quickly bought out. This shows that there is a high level of buyer demand in the market.
Based on recent trends, buyer demand for Bitcoin likely came from two main sources
First, the skyrocketing volume of the CME Bitcoin futures market and the rising assets managed by Grayscale show that institutional demand is high.
Second, the steady influx of stablecoins into the exchanges suggests that sideways capital is moving back into the cryptocurrency market.
In addition to the continuous inflows of sideways and new institutional capital into Bitcoin, sentiment around BTC continues to improve.
Rick Rieder, the CIO of Fixed Income at BlackRock (the company has managed $ 7.43 trillion since 2019), on CNBC:
“I think cryptocurrency is here to stay. I think it’s permanent. I believe millennials‘ receptivity to technology and cryptocurrency is real. Digital payments are real. So I think Bitcoin will stay here. “
Previously, JPMorgan and other investment banks had made comparisons between Bitcoin and gold.
What’s next for BTC?
It’s difficult to set a price for Bitcoin or come up with a fair valuation for BTC. But considering that more institutions are comparing BTC to gold, it would make sense to value BTC as a fraction of gold’s market cap.
Sam Bankman-Fried, CEO at FTX and Head of Alameda Research, explains:
„To be honest, this always struck me as one of the most bullish facts, who knows what the ‚right‘ price for BTC is, but does it matter more or less than 1% as much as gold?“
Currently, the market capitalization of gold is estimated at around $ 10 trillion. The market cap of Bitcoin is despite the recent rally in less than 4% of the gold price.
This can be cited as a strong argument that BTC as a store of value and safe haven is still undervalued, at least in the long term.