UPDATE: BlackRock's Fink says rise of bitcoin shows 'how much money laundering is being done in the world'
By Mark DeCambre, MarketWatch
Fink: 'I am a big believer in the potential in what cryptocurrencies can do'
Larry Fink, chief executive officer of BlackRock Inc., on Tuesday said bitcoin and other cryptocurrencies may help to identify the extent of money laundering happening across the globe.
The rapid ascent of cryptocurrencies "identifies how much money laundering there is being done in the world," Fink said during a Bloomberg interview of the Wall Street luminary at the BlackRock Fixed Income ETF conference in New York.
The belief that bitcoin and other digital assets, like ethereum and litecoin, are being employed for online gambling, tax evasion, and money laundering, has been one of the biggest criticisms of cryptos, which are viewed as a shadowy, mostly unregulated sector.
Check out:Opinion: Stay away from bitcoin and ethereum--they are complete garbage (http://www.marketwatch.com/story/stay-away-from-bitcoin-its-complete-garbage-2017-06-15)
Overall, Fink offers a relatively nuanced view of bitcoin and other cryptocurrencies, which presently boast a combined market value of about $144 billion, with bitcoin representing about half of that value, according to Coinmarketcap.com (https://coinmarketcap.com/).
"I am a big believer in the potential in what cryptocurrencies can do," he said. He said he saw "huge opportunities" but that presently the atmosphere around bitcoin was "more speculative."
Those comments echo some of the criticisms that have been leveled by other investing pros against cyberunits that have achieved a notable ascendancies in popularity and price over the past year.
Indeed, J.P. Morgan Chase & Co. (JPM) Chief Executive Jamie Dimon has described bitcoin as "a fraud (http://www.marketwatch.com/story/dimon-calls-bitcoin-a-fraud-and-may-have-delivered-the-biggest-blow-to-the-digital-currency-2017-09-12)" that would "eventually blow up."
"It's worse than tulip bulbs and won't end well," Dimon said, referring to the classic 17th century asset bubble (http://time.com/4896942/tulip-fever-history/).
Fink was most definitive in his optimism around so-called blockchain, an open-sourced, distributed ledger, which underpins cryptocurrencies. Fink said the asset manager is looking at blockchain technologies as a way to facilitate the "more flow through of information."
The BlackRock CEO's comments come as bitcoin has created a clear divide between (http://www.marketwatch.com/story/bitcoin-is-creating-stark-divisions-on-wall-street-2017-10-02) those who think the digital currency is a bubble and those who believe it has a future.
In recent trade, a single bitcoin was down 2.6% at $4,288, but has been up about 350% so far in 2017. Comparatively, the S&P 500 index is up 13% year to date and the Dow Jones Industrial Average has gained 14.5% over the same period.
See also: What investors need to know about initial coin offerings (http://www.marketwatch.com/story/what-are-icos-and-why-is-the-sec-taking-steps-to-protect-investors-from-them-2017-07-27)
-Mark DeCambre; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires