Gold dips below $4000 as BlackRock CEO says fear drives crypto

TLDR

• Gold prices fell below $4,000 after hitting highs above $4,377 last week.
• Larry Fink says crypto and gold are being bought out of asset debasement fear.
• Central banks now view tokenization as their most urgent financial question.
• BlackRock holds over 805,000 BTC through its iShares Bitcoin Trust fund.

Gold prices dipped below $4,000 this week after recently touching record highs, prompting investor shifts toward what BlackRock CEO Larry Fink called “assets of fear” like gold and cryptocurrency. Speaking at the Future Investment Initiative (FII) conference in Saudi Arabia, Fink pointed to rising concerns about asset debasement and financial security. He also outlined what central banks view as their biggest question moving forward: the role of tokenization in the future of finance.

Investors Turn to “Assets of Fear” Amid Financial Uncertainty

BlackRock CEO Larry Fink described gold and cryptocurrency as “assets of fear” during his remarks at the FII conference. He said investors are increasingly buying these assets due to concerns over asset debasement and instability in global markets.

“You own these assets because you’re frightened of the debasement of your assets,” said Fink. He noted that both physical and financial security are top concerns for investors, especially as they seek safe places to store value during uncertain times.

The comments came shortly after gold prices dropped below $4,000 per ounce. This followed a record high above $4,377 the week before, according to TradingView data. Despite the price dip, central banks have continued to buy gold at increased rates throughout the year.

U.S. Dependence on Foreign Treasury Buyers Seen as Risk

Fink also addressed a core issue facing the U.S. economy: its reliance on international investors to purchase a large share of Treasury securities. He said that about 30% to 35% of U.S. Treasury sales depend on foreign buyers.

“To me, that’s the biggest issue today,” Fink said. He warned that any change in this demand could create major effects across the financial system due to this dependency on foreign capital. He stressed the need for unlocking more private capital from domestic sources to reduce this reliance.

This concern comes at a time when rising interest rates and geopolitical tensions are influencing global investment behavior. It also ties into broader concerns over U.S. dollar demand and stability.

Central Banks Focus on Tokenization and Digital Currencies

According to Fink, central banks around the world are increasingly focused on one key issue: the future of tokenization and digital assets. He said this has become the most common question central banks ask BlackRock.

“The biggest question from central banks is what role tokenization and digitization will play,” Fink noted. He said central banks want to know how fast they should move to digitize national currencies and what this could mean for their monetary systems.

Fink pointed to tokenization as a trend that is moving faster than most expect. He said many countries are not ready for how quickly financial assets are being digitized and tokenized.

“We’re not spending enough time talking about how quickly we’re going to tokenize every financial asset,” Fink said. He added that this transition is coming soon and will affect all areas of global finance.

Rapid Shift Toward Tokenized Assets

The BlackRock CEO has been consistent in his view that most financial assets will eventually become tokenized. At the FII event, he reinforced this idea, saying the shift is now happening more rapidly.

Tokenization involves creating digital versions of traditional assets that can be traded on blockchain-based platforms. This process could change how assets are managed, traded, and recorded.

Fink said many countries are not preparing for this shift and may face challenges adapting their systems. He also mentioned that tokenization could affect currency dynamics and global payment networks.

BlackRock, which manages trillions in global assets, has already moved into digital assets. Its iShares Bitcoin Trust now holds over 805,000 BTC on behalf of its clients, making it one of the largest institutional holders of Bitcoin.