The CEO of BlackRock, the world’s largest asset manager, believes most crypto companies could go out of business in the near future.
During an interview at the New York Times DealBook Summit last week, Larry Fink gave his take on the current crypto crisis.
“I actually think most companies will disappear,” he said.
Fink was referring to the implosion of FTX, a cryptocurrency exchange that collapsed in early November. BlackRock, like many other financial institutions, had invested millions of dollars in the company.
Some of the world’s largest crypto companies, including Coinbase Global Inc and MicroStrategy Inc, have seen their value drop more than 25 percent in the past month.
And at least according to Fink, many smaller players in the crypto world simply won’t survive.
But despite his skepticism about digital currencies, the 70-year-old finance director had some positive things to say about the technology.
Specifically, security tokenization, which creates a digital representation of an asset on the blockchain. This can mean decentralized and instant authentication of transaction and ownership history.
“If we can have this distributed ledger, that we know every benefit owner, every benefit seller, we all have our code, who buys, who sells, instant settlement, it changes the whole ecosystem, you don’t need escrow banks,” Fink said .
Sam Volkering, Head of Crypto Research at Southbank Research, told Metro.co.uk: “I saw the interview Fink did at the NYT Deal Book summit and there are some merits in his statement about most crypto companies closing.
“In a sense, every crypto cycle is similar in that companies are overburdened and overburdened and have poor business standards – this will lead to failure just like normal markets.
“But what Fink also said was that he believes in next-gen securities and he said he believes decentralized ledger technology is very important.
“The way he talked about things like instant settlement, buyer and seller transparency, voting, and all the things that crypto networks are doing right now is very positive for the longer-term future of decentralized finance (DeFi) opportunities.”
Author: Jeff Parsons
Source: Metro.co
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