BlackRock CEO Larry Fink appeared for an interview at the World Economic Forum’s conference in Davos to discuss the future of digital currency and said that Bitcoin (BTC) could climb to $700,000 per coin amid currency debasement fears.
The CEO said collective small allocations from asset managers between 2%–5% could drive such a price increase. Fink told Bloomberg:
“If you’re frightened about the debasement of your currency or you’re frightened of the economic or political stability of your country, you can have an internationally based instrument called Bitcoin that will overcome those local fears.”
“And so, I’m a big believer in the utilization of that as an instrument,” Fink continued. The BlackRock CEO also qualified his statements by adding that he was not promoting Bitcoin.
Fink also said he was concerned about the possibility of elevated inflation over the next 12 months and warned there was a danger in assuming that peak inflationary levels have already been reached.
M2 money supply 1969–2024, a measure of the total amount of USD in circulation. Source: TradingView
Inflationary fears persist despite rosy CPI figures
Annual Consumer Price Index (CPI) inflation data for 2024 came in slightly lower than expected at 3.2%. Analysts had forecast 3.3%.
However, some investors and analysts have argued that the CPI, which measures inflation based on a rotating basket of common household goods, is a poor measure of inflation.
A shareholder proposal submitted to Meta in January, requesting that the company adopt Bitcoin as a reserve asset, suggested that the true inflation rate could be double the reported CPI figures.
The National Center for Public Policy Research — a think tank advocating for free markets — submitted the same shareholder proposal to Amazon in December citing the same arguments.
According to the think tank, the average CPI inflation over the past four years came in at roughly 4.95% and peaked at 9.1% in June 2022.
“In reality, the true inflation rate is significantly higher, with some studies estimating it to be nearly double the CPI at times. So a corporation’s assets need to appreciate at those rates just to break even,” the author of the proposal wrote.
