BlackRock's Rieder says bitcoin can replace gold 'to a large extent' and crypto is 'here to stay'

Published Fri, Nov 20 20206:13 PM ESTUpdated Fri, Nov 20 20206:18 PM EST

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

(This story is for CNBC Pro subscribers only.) BlackRock 's Rick Rieder on Friday touted the benefits of bitcoin, telling CNBC he believes that cryptocurrency in general is "here to stay." The comments from Rieder, chief investment officer of global fixed income at the world's largest money manager, come after high-profile Wall Street investors Paul Tudor Jones and Stanley Druckenmiller have in recent weeks offered positive comments on bitcoin. "I think cryptocurrency is here to stay. I think it is durable, and you've seen the central banks that have talked about digital currencies," Rieder said on "Squawk Box." "I think digital currency and the receptivity — particularly millennials' receptivity — of technology and cryptocurrency is real. Digital payment systems is real, so I think bitcoin is here to stay." Bitcoin this week hit its highest level since December 2017 , when it eclipsed the $18,000 mark. The digital coin has surged almost 160% this year against the backdrop of the coronavirus pandemic , which has caused policymakers around the world to unleash a flood of fiscal and monetary stimulus. Rieder, who also heads BlackRock's global allocation team , said he wasn't sure how much bitcoin is worth. But he added he believes it has the potential to rival traditional safe-haven assets such as gold, which is up almost 21% in 2020 . "It's hard to say, 'Is it worth the price it's trading at today?' But do I think it's a durable mechanism that ... I think will take the place of gold to a large extent? Yeah, I do, because it's so much more functional than passing a bar of gold around," Rieder said. "And by the way, the tracking, the way you can track crypto in terms of crime, etc., there's real efficacy." Billionaire investor Michael Novogratz also told CNBC , on Wednesday, that he believes bitcoin is jockeying with gold for a place in portfolios. Indeed, both Druckenmiller and Jones view bitcoin as a hedge against inflation, with Jones going as far as telling CNBC, on Oct. 22, that it is "the best inflation trade." "Bitcoin is replacing gold in lots of ways," Novogratz said Wednesday on "Squawk Box." For that reason, the Galaxy Digital CEO and widely known crypto bull said he sees significant upside for bitcoin. "Today it's about 3% of gold. Getting to 10% of gold doesn't seem crazy, and that's $55[,000], $60,000 assuming gold goes up a little bit," added Novogratz, a former macro trader at Goldman Sachs . Rieder, for his part, maintained that putting a value on bitcoin is a challenge. "When people come out and say, 'This is what I think it's worth,' I'm not sure I understand the algorithm that actually prices it. Do I think there's more buyers than sellers going forward in terms of crypto? I do," he said.

Rick Rieder

Anjali Sundaram | CNBC

(This story is for CNBC Pro subscribers only.)

BlackRock's Rick Rieder on Friday touted the benefits of bitcoin, telling CNBC he believes that cryptocurrency in general is "here to stay."

The comments from Rieder, chief investment officer of global fixed income at the world's largest money manager, come after high-profile Wall Street investors Paul Tudor Jones and Stanley Druckenmiller have in recent weeks offered positive comments on bitcoin.

"I think cryptocurrency is here to stay. I think it is durable, and you've seen the central banks that have talked about digital currencies," Rieder said on "Squawk Box." "I think digital currency and the receptivity — particularly millennials' receptivity — of technology and cryptocurrency is real. Digital payment systems is real, so I think bitcoin is here to stay."