BlackRock CEO Warns Bitcoin Could Threaten Dollars Reserve Status

The status of the US dollar as the world’s reserve currency is under threat, according to BlackRock CEO Larry Fink in his annual letter to investors.

Fink highlighted that the unchecked rise of the national debt and budget deficit in the United States could lead to a decline in the dollar’s dominance in favor of digital assets like Bitcoin.

Since the launch of the national debt clock in Times Square in 1989, the US debt has been increasing at a rate three times faster than the Gross Domestic Product (GDP), he observed.

In 2024, the American government’s expenditures on debt servicing have surpassed $952 billion, exceeding defense spending. If current trends continue, by 2030 mandatory government payments and interest expenses may entirely consume federal revenues, resulting in a perpetual deficit.

Despite these risks, Fink emphasized that decentralized financial systems offer markets increased speed, transparency, and accessibility. However, a growing trust in Bitcoin could undermine the dollar’s standing, jeopardizing the economic advantage of the United States.

Fink also discussed the potential for asset tokenization, comparing the technology to the shift from paper letters to email. Through tokenization, stocks, bonds, and real estate can be converted into digital formats, making investments more accessible, speeding up transactions, and eliminating delays between buying and settlement.

He stated that this technology simplifies asset ownership, allows for fractional ownership, and broadens access to high-yield investments. This could revolutionize financial markets by increasing the presence of less affluent investors.

Additionally, on January 22, the BlackRock head mentioned a condition under which Bitcoin could reach $700,000. He asserted that investors across all categories—ranging from retail to institutional—would need to allocate 2% to 5% of their portfolios to the leading cryptocurrency.