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The now-bankrupt FTX appears to have engaged in "misbehaviors," according to BlackRock Chief Executive Larry Fink, but the technology underpinning cryptocurrencies is still relevant today.
Fink said, "We'll have to wait and see how this all works out (with FTX). We can currently make all of the judgments, and it appears that there were serious penalties for the misbehaviors.
During an event sponsored by the New York Times DealBook, he predicted most crypto companies wouldn't exist in the future.
The US bankruptcy court granted Chapter 11 protection to FTX following its abrupt collapse on November 11. The company claims it owes more than 1 million creditors money.
According to him, BlackRock made a $24 million investment in FTX via a billionaire fund it administers. Sam Bankman-FTX had received funding from a number of other international asset managers, including Temasek Holdings, the venture capital firm Tiger Global, and Sequoia Capital.
Fink stated that he believes the technology underpinning crypto "will be very essential" despite all of the issues surrounding FTX. "I think the tokenization of securities will be the next generation for markets and for securities," he continued.
Treasury Secretary for the United States Janet Yellen called for regulation earlier on Wednesday and expressed her continued skepticism about crypto assets.
Consequently, Fink painted a bleak picture of the economy, pointing to unusually high inflation, high-interest rates, slower growth, and a lack of room for fiscal intervention.
In fact, he said, "we're going to enter a period of greater what I would call malaise." "We just won't have the kind of economy that is built on actual growth that we were used to,"
Even so, he thinks the climate for investing is better, particularly for investments that increase in value when interest rates do.