BlackRock CEO warns Bitcoin could replace US Dollar as global reserve currency, crypto ETFs witness inflows

• In an annual letter to investors, BlackRock CEO Larry Fink warned that digital assets could offset America's economic advantage.
• Fink claims that the US Dollar risks losing its world reserve currency status to digital assets like Bitcoin.
• CoinShares' weekly report notes that crypto ETFs saw inflows of $225 million last week.

BlackRock CEO Larry Fink stated in an annual letter to investors on Monday that the US national debt could cause the Dollar's global reserve status to be replaced with Bitcoin if investors begin to see the digital currency as a safer asset. Meanwhile, Bitcoin exchange-traded funds (ETFs) saw inflows of $196 million last week, with altcoin products netting inflows for the first time in 4 weeks, per CoinShares weekly report.

Bitcoin could replace the US Dollar as a global reserve: BlackRock CEO

In an annual letter to investors, BlackRock CEO Larry Fink shared concerns on the increasing US national debt's effect on the Dollar's global reserve status.

Fink emphasized strong support for digital assets, maintaining that it is an extraordinary innovation. However, he noted that digital assets such as Bitcoin could offset America's economic advantage if investors start seeing it as a "safer bet than the Dollar."

He shared that the US Dollar has been the world's reserve currency for decades, but the position isn't guaranteed to last forever.

"If the US doesn't get its debt under control, if deficits keep ballooning, America risks losing that position to digital assets like Bitcoin," wrote Fink.

Fink further discussed the importance of real-world asset tokenization to investors. He stated that tokenization "makes investing much more democratic," sharing his expectation for tokenized funds to become as familiar to investors as ETFs.

BlackRock is the largest issuer of tokenized real-world assets, with its BlackRock USD Institutional Digital Liquidity (BUIDL) Fund nearing $2 billion.

The asset manager holds the largest crypto ETF, iShares Bitcoin Trust (IBIT), with over $39 billion in assets under management (AuM). The company also launched its iShares Bitcoin ETP in Europe to expand its fund exposure in the region.

Meanwhile, global crypto ETFs witnessed $226 million in net inflows last week, according to CoinShares’ weekly report. Bitcoin witnessed the largest inflows, netting $195 million. However, the total assets under management of Bitcoin ETFs remain at their lowest level —  at $114 billion — since the post-US election rally.

Altcoin products also netted inflows of $33 million following a four-week streak of outflows. Altcoin ETFs with positive flows include Ethereum, XRP, Solana and SUI products, recording inflows of $14.5 million, $4.8 million, $7.8 million and $4.0 million, respectively.