Some traditional bankers, it seems, have adopted adversarial stances on digital assets and/or businesses related to them. For example, Larry Fink, the CEO of BlackRock (NYSE:BLK), believes most cryptocurrency-related companies will cease to exist at some point. Also, two members of the European Central Bank (ECB) opined that Bitcoin (BTC-USD) will fade into irrelevance. However, you don’t have to sell your Bitcoin just because some well-heeled folks aren’t big fans of it.
It looks like the fiasco involving cryptocurrency exchange FTX will have ripple effects throughout the crypto-sphere for a while. Lately, it seems that anything and everything related to the blockchain is under suspicion.
The criticism is heating up, and it’s even gotten to the point where a major central bank is predicting Bitcoin’s demise. Yet, you don’t have to panic-sell your digital assets. Try adopting a “this, too, shall pass” attitude, as it’s normal for disruptive technologies to experience growing pains.
BlackRock CEO Braces for Crypto-Firm Washout
It’s not unusual for people to become cynical or pessimistic after a bad experience. Perhaps this is what’s happening with Fink, as BlackRock reportedly invested $24 million in FTX before the cryptocurrency exchange imploded.
At the end of November, FTX owed more than $3 billion to its top 50 creditors. So, BlackRock isn’t likely to recoup much, if any, of the $24 million it sunk into FTX.
Now, Fink apparently feels that FTX’s collapse will cause most cryptocurrency firms to disappear. “I actually believe most of the companies are not going to be around,” the BlackRock CEO cautioned.
Don’t get the wrong message from Fink’s warning, though. He didn’t predict Bitcoin’s demise. Besides, a washing out of lesser crypto-related businesses could help restore integrity and credibility to the world of digital assets.
The ECB Slams Bitcoin
Unlike Fink, the ECB (or more precisely, two of its members) actually did predict the end of Bitcoin. This was declared in a blog post titled, “Bitcoin’s Last Stand,” written by Ulrich Bindseil, director general of Market Infrastructure and Payments at the ECB, and Adviser Jürgen Schaff.
Of course, it shouldn’t be too surprising than an established central bank would criticize a decidedly anti-establishment currency like Bitcoin. Bindseil and Schaff merely point out the growing pains that a relatively new technology like cryptocurrency is bound to experience.
For now, it’s true that Bitcoin “is rarely used for legal transactions,” and promoting Bitcoin “bears a reputational risk for banks.” Adoption of a new and different type of currency will take time. Plus, the FTX fallout will fade over time, even if it doesn’t disappear completely.
I encourage you to read Bindseil and Schaff’s blog post, just to see how central bankers think. It will test your resolve if you’re a Bitcoin holder, no doubt. However, the ECB’s concerns should be resolved eventually as Bitcoin gains adoption and credible crypto firms distance themselves from FTX and Bankman-Fried.
You Don’t Need to Sell Your Bitcoin
Just because some central bankers are threatened by Bitcoin doesn’t mean you have to react by panic-selling. Instead, you can expect some crypto-related businesses to fall by the wayside, and that’s not necessarily a bad thing.
Criticism of a comparatively new technology should be expected, and adoption doesn’t happen as quickly as some investors might hope it would. Just be patient, and understand that disruptive currencies are going to face resistance. Feel free, then, to hold your Bitcoin, as the FTX disaster will someday be considered old news.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.