The U.S. risks losing its global financial dominance to Bitcoin if the country’s deficits keep growing, BlackRock CEO Larry Fink warned in his annual letter.

BlackRock CEO Larry Fink warns the U.S. dollar’s dominance isn’t guaranteed as soaring debt could push investors toward “digital assets like Bitcoin (BTC),” Fink wrote in his annual letter on Monday, March 31.

The head of the world’s largest asset manager, overseeing $11.5 trillion in assets as of 2024, noted that the national debt has grown three times faster than GDP since 1989.

“This year, interest payments will surpass $952 billion — exceeding defense spending. By 2030, mandatory government spending and debt service will consume all federal revenue, creating a permanent deficit.”

Larry Fink

While Fink acknowledged the innovation behind decentralized finance, he also warned that it could erode America’s economic edge, stating that decentralized finance “could undermine America’s economic advantage if investors begin seeing Bitcoin as a safer bet than the dollar.”

Tokenization makes investing ‘more democratic’

BlackRock’s Bitcoin ETF took off in 2024 and pulled in over $48 billion by March, making crypto more mainstream. Still, Fink sees blockchain as way bigger than just Bitcoin.

For example, he sees tokenization as the next major evolution in finance, suggesting that “every stock, every bond, every fund — every asset — can be tokenized,” and arguing that blockchain technology could make markets more efficient and accessible.

More importantly, Fink says tokenization makes investing “much more democratic,” as fractional ownership could lower “one of the barriers to investing in valuable, previously inaccessible assets like private real estate and private equity.”