Former Goldman Sachs CEO and Chairman Lloyd Blankfein said that his view of cryptocurrencies has evolved after digital assets attracted trillions of dollars in value and a rapidly growing ecosystem.
On Monday, Blankfein was asked by CNBC’s Andrew Ross Sorkin for his view on the nascent asset class, who noted that the former banker has voiced skepticism in the past.
“Look, my view of it is evolving,” Blankfein said. “I can’t predict the future, but I think it’s a big thing to be able to predict the present, like, ‘What is happening?’ And I look at the crypto, and it is happening.”
By “happening,” Blankfein means that the ecosystem around cryptocurrencies has matured in the past year, he explained. Traditional financial companies including Goldman have begun offering clients ways to buy, trade and custody digital currencies, and a parallel universe of decentralized finance protocols has emerged so holders can lend out and earn yield on their coins.
Cryptocurrencies have been selling off for weeks as expectations of rising interest rates hit riskier assets. The total market cap of cryptocurrencies fell below $2 trillion last week after reaching a high of $3.1 trillion in November.
“It’s lost a lot of value, but at a point where it’s trillions of dollars of value contributing to it and whole ecosystems are growing around it,” he said. “Of course, we have the benefits of instantaneous transfer and reduction of credit risk and all the benefits of blockchain.”
In the past, Blankfein has criticized Bitcoin as a store of value and said that regulators should be “hyperventilating” over its rise.
“I may be skeptical, but I’m also pragmatic about it,” Blankfein said on Monday. “And so guess what? I would certainly want to have an oar in that water.”
In the wide-ranging interview, Blankfein discussed how uncertainty over inflation has caused bearishness though out markets in recent weeks. He also said that banks trade at an “unbelievably low multiple” and that some of the best investments are made in declining markets.
Cryptocurrencies have been selling off for weeks as the expectation for rising interest rates hit riskier assets.