Several crypto companies will go bankrupt, claims the finance manager

We’re in the midst of a ‘crypto winter’ according to some experts (Credit: Getty)

The CEO of BlackRock, the world’s largest asset manager, believes most crypto firms may go out of business in the near future.

During an interview at last week’s New York Times DealBook Summit, Larry Fink gave his thoughts on the current crypto crisis.

“I actually think most of the companies are not going to exist,” he said.

Fink was referring to the implosion of FTX, a cryptocurrency exchange that collapsed in early November. BlackRock, like many other financial institutions, had invested millions of dollars in the company.

Some of the world’s biggest crypto companies, including Coinbase Global Inc and MicroStrategy Inc, have seen their values ​​drop more than 25 percent last month.

And, at least according to Fink, many smaller players in the crypto world just won’t survive.

But despite being a digital currency skeptic, the 70-year-old CFO had some positive things to say about the technology.

Specifically, the tokenization of securities – whereby a digital representation of an asset is created on the blockchain. This could mean a decentralized and instant authentication of the transaction and ownership history.

“If we can have the distributed ledger that we know every real owner, every real seller, we all have our code for who’s buying, who’s selling, instant settlement, it changes the whole ecosystem, you don’t need trust banks,” Fink said.

Larry Fink on stage at the 2022 New York Times DealBook (Credit: Getty Images)

Larry Fink on stage at the 2022 New York Times DealBook (Credit: Getty Images)

Sam Volkering, head of crypto research at Southbank Research, told “I saw the interview Fink did at the NYT Deal Book summit and his point about most crypto companies folding has some merit.

“In a sense, every crypto cycle is similar in that companies overstretch, are overleveraged and have poor business standards – which will lead to failure, just like normal markets.

But what Fink also said was that he believes the next generation of securities will do that tokenization of securitiesand he said he thinks decentralized ledger technology is very important.

“The way he talked about things like instant settlement, transparency for buyers and sellers, voting, all the things that crypto networks are doing now, is very positive for the long-term future of decentralized finance (DeFi) opportunities.”

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