Scared? Then buy Bitcoin.<\/p>\n
That\u2019s what BlackRock CEO Larry Fink said on stage during a press event in New York City on Tuesday.<\/p>\n
\u201cBitcoin is an asset of fear,\u201d Fink said, sharing the stage with Coinbase CEO Brian Armstrong.<\/p>\n
\u201cYou own Bitcoin because you\u2019re frightened of your physical security. You own it because you\u2019re frightened of your financial security.\u201d<\/p>\n
Fink\u2019s thesis frames Bitcoin as fundamentally different from traditional investments such as equities and bonds.<\/p>\n
While most of BlackRock\u2019s $13.5 trillion in assets represents \u201chope,\u201d said Fink during the DealBook Summit, Bitcoin sits in an uneasy category of investors who are fearful of government debasement<\/a>, financial instability, and geopolitical chaos.<\/p>\n That fear drives Bitcoin higher when uncertainty spikes and lower when fear subsides, the 72-year-old executive said.<\/p>\n Fink\u2019s comments mark a dramatic evolution from 2017, when he called Bitcoin \u201can index for money laundering and thieves.\u201d<\/p>\n Today, BlackRock manages the world\u2019s largest Bitcoin ETF with more than 780,000 Bitcoin worth about $80 billion.<\/p>\n A lot of Bitcoin\u2019s main allure rests on a simple premise: governments can\u2019t print more of it, while they can of their domestic currencies.<\/p>\n \u201cThe long-term fundamental reason you own [Bitcoin] is because of debasement.\u201d Fink said.<\/p>\n Back in October, JPMorgan analysts coined the term \u201cdebasement trade\u201d to describe a bet on the government\u2019s inability to manage its finances properly.<\/p>\n In essence, investors retreat from sovereign debt and fiat currencies, afraid that their purchasing power will erode as governments try to lower their massive debt burden by printing more money.<\/p>\n Countries that have faced severe currency debasement have turned to Bitcoin for survival.<\/p>\n In Argentina, for instance, where the peso has collapsed repeatedly, citizens use Bitcoin en masse. Venezuela and Lebanon also show similar patterns \u2014 Bitcoin adoption spikes where government monetary policy fails. The three land in the top 20 for crypto adoption, according to Chainalysis.<\/p>\n And it\u2019s not just individual investors. Fink revealed sovereign wealth funds are now accumulating Bitcoin<\/a> as a hedge.<\/p>\n \u201cThere are a number of sovereign funds that are standing by,\u201d he said during the panel. \u201cThey\u2019re adding incrementally at $120,000, at $100,000. I know they bought more at $80,000.\u201d<\/p>\n But for all that fear, there\u2019s a frightening characteristic that\u2019s also embedded into Bitcoin itself: volatility.<\/p>\n