Author: RWA Industry Research Institute
BlackRock CEO Larry Fink formally acknowledged in his 2025 annual letter to shareholders that Bitcoin could challenge the global reserve currency status of the US dollar. He warned that uncontrollable US deficits could pave the way for Bitcoin to become a global reserve currency.
The letter explicitly stated that if the US government fails to control its debt and deficits, Bitcoin represents both a disruptive innovation and a geopolitical risk. The letter noted, “If the US cannot control its debt and if the deficit continues to swell, the US could potentially hand this status over to digital assets such as Bitcoin.”
(Source: BlackRock)
This statement marks a significant acknowledgment from the head of a giant asset management firm managing $10 trillion globally that digital assets could replace the US dollar in the global market.
Fink mentioned Bitcoin seven times and the dollar eight times in the letter. The importance of such frequency in Fink’s annual letter cannot be overstated.
On January 11, 2024, the US Securities and Exchange Commission approved BlackRock’s Bitcoin spot ETF (IBIT), opening the door for traditional investors on Wall Street to enter the digital asset space. Furthermore, with former President Trump shifting to support Bitcoin, the backing of cryptocurrency among domestic giants in the US is gradually increasing.
BlackRock’s letter outlined a divergent viewpoint; although decentralized finance (DeFi) is hailed as “an extraordinary innovation,” the company warned that its growth could undermine the US’s financial dominance.
The report emphasized that risks could arise if investors begin to view Bitcoin as a more stable long-term store of value than the dollar, particularly amid ongoing US federal deficits and sovereign debt levels.
This framework positions Bitcoin not merely as a speculative asset or store of value, but as a macro hedge against US sovereign instability. Its implications are similar to arguments put forth by institutional investors in recent years, who view digital assets as insurance against currency devaluation or geopolitical turmoil.
As Fink emphasized, “Two things can happen at the same time,” referring to the coexistence of innovation and risks in the development of digital assets.
BlackRock’s internal positioning on Bitcoin is not purely theoretical; the letter disclosed that its Bitcoin spot ETF launched in the US became the largest product in ETF industry history, with over $50 billion in assets managed in its first year. Among all ETF categories, its net asset inflow ranked third, second only to the S&P 500 index fund.
Retail adoption is a major driving factor, with over 50% of demand for the company’s Bitcoin ETP coming from individual investors.
It is noteworthy that 75% of participants had never owned BlackRock iShares products before, indicating that Bitcoin is becoming an entry mechanism to attract new investor demographics.
The company has also expanded its ETP products to Canada and Europe, marking the cross-border growth of institutional-level Bitcoin investment tools.
Beyond Bitcoin, Fink’s letter also presented a broader argument that tokenization could transform capital markets in a way comparable to the shift from postal services to email. Fink compared the tokenized asset infrastructure to the SWIFT network, arguing that it could enable instant peer-to-peer asset flows, thus circumventing traditional financial intermediaries.
BlackRock believes tokenization represents a fundamental shift in asset ownership, primarily achieved through decentralization, improved voting systems, and increased opportunities for high-yield investment tools.
The letter stated that these developments could lower operational and legal barriers that have historically limited retail investors’ participation in certain asset classes, thereby democratizing capital markets.
The company also emphasized the necessity of updating digital identity systems, using the Indian model as a benchmark. The letter noted that over 90% of Indians can securely verify smartphone transactions, positioning the country as a leader in the digital infrastructure necessary for a tokenized economy.
Incorporating Bitcoin as a potential alternative to the dollar reflects a significant shift in institutional thinking. While mainstream recognition of Bitcoin as “digital gold” has grown in recent years, BlackRock’s wording points to a deeper economic argument—that failures in macroeconomic policy could accelerate the shift toward a decentralized monetary system.
By referencing both tokenization and Bitcoin within the same strategic outlook, the letter proposed a framework in which digital assets could serve as potential systemic alternatives to fiat currencies.
For policymakers, this message is subtle yet clear: the US must modernize its financial system and manage its debt trajectory to maintain its currency leadership.
