BlackRock BLK CEO Larry Fink raised serious concerns about the long-term health of the U.S. economy, warning that unchecked national debt and growing fiscal deficits could undermine the dollar’s dominance as the world’s reserve currency.
What Happened: In his annual letter to shareholders released on Monday, he cautioned that digital assets like Bitcoin BTC/USD may emerge as a viable alternative if the government fails to rein in spending.
“The dollar’s position as the global reserve currency is not guaranteed,” Fink wrote.
He pointed to a troubling trend: since 1989, when the national debt clock first went up in Times Square, U.S. debt has expanded at triple the rate of economic growth.
He projected that interest payments on government debt will exceed $952 billion this year, surpassing defense spending for the first time.
If this trajectory isn’t corrected, Fink warned that by the end of the decade, every dollar of federal revenue will be consumed by mandatory spending and debt service—pushing the nation into a state of perpetual deficit.
While acknowledging the disruptive potential of decentralized finance, Fink cautioned that digital innovation could weaken America’s economic standing if Bitcoin begins to be seen as a safer store of value than the dollar.
“I’m not against digital assets,” he noted.
“Decentralized finance is transformative—making markets more efficient and transparent—but it could also threaten U.S. financial supremacy.”
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Highlighting BlackRock’s growing crypto footprint, Fink spotlighted the success of its U.S. spot Bitcoin ETF, IBIT, which has become the largest ETF debut in history.
Since its launch, IBIT has grown to more than $50 billion in assets under management, attracting $37.4 billion in net inflows during 2024 alone.
This puts it far ahead of rivals like Fidelity’s FBTC, which has drawn $11.5 billion to date, according to data from The Block.
IBIT has also emerged as the third-largest asset gatherer across the entire ETF industry—trailing only behind the dominant S&P 500 funds.
Notably, over half its demand came from retail investors, and three-quarters of those investing had never previously bought an iShares product, indicating a broadening investor base.
BlackRock has since extended its Bitcoin investment offerings to markets in Canada and Europe.
Fink also revisited an earlier estimate he made, suggesting that if global investors began allocating 2% to 5% of their portfolios to Bitcoin, its price could someday reach $700,000.
What’s Next: Looking beyond Bitcoin, Fink emphasized the transformative power of tokenization—turning real-world assets like bonds, real estate, or equities into digital tokens tradable on a blockchain.
He likened the shift to the leap from postal services to email, suggesting this technological leap could fundamentally change how financial markets operate.
“Every asset can be tokenized,” Fink said. “If that happens, investing will be revolutionized. Markets would never need to close. Settlements would be instantaneous. And trillions tied up in clearing delays could be put back to work immediately, accelerating economic growth.”
He argued that tokenization has the potential to make investing more inclusive by enabling fractional ownership, faster shareholder voting, and broader access to high-yield assets—benefiting everyday investors, not just the ultra-wealthy.
Fink concluded his letter by reflecting on the role of financial markets in promoting global prosperity.
While he acknowledged the current economic uncertainty, he reminded investors that history shows resilience often prevails.
“Periods of doubt are nothing new,” he wrote. “But like before, innovation and human adaptability will drive long-term economic stability.”
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