BlackRock CIO Says $9 Trillion in Cash Is Seeking New Investments as Bitcoin Rebounds

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Bitcoin is extending its rebound in the $66,000 range, while a senior BlackRock executive said a massive pool of sidelined cash could reenter markets. Hopes for a US-Iran agreement, falling oil prices and improving risk appetite are fueling expectations that money parked outside the market may start moving again.

Forbes reported on June 16 that Rick Rieder, BlackRock’s chief investment officer for global fixed income, said in a Bloomberg interview that “there’s a tremendous amount of cash on the sidelines.” He said as much as $9 trillion is looking for new places to invest.

Rieder said expectations for a record SpaceX initial public offering and a peace agreement between the US and Iran are shifting market sentiment. “When good news comes, people can get back into the market,” he said. “When that happens, it will be fairly explosive.”

Forbes said Bitcoin has recently rebounded alongside stocks. Expectations for a US-Iran deal have risen, while global crude prices have fallen to about $80 a barrel. That has supported sentiment toward risk assets on hopes that lower energy costs will ease inflation pressures.

Rieder also said Federal Reserve Chair Kevin Warsh should refrain from raising interest rates. Lower oil prices could reduce price pressures, underscoring the need for the Fed to be cautious about any additional tightening.

This week’s Federal Open Market Committee meeting is also a key market variable. Warsh is set to announce his first FOMC decision, and markets are pricing in a high chance that the benchmark rate will remain unchanged. The Fed’s assessment of inflation, employment and oil prices will shape liquidity conditions in the second half of the year.

Dean Chen, an analyst at Bitunix, said Rieder’s remarks suggest the issue is not a lack of liquidity. Rather, liquidity is searching for a new destination.

Chen said prospects for a peace agreement, lower energy prices and expectations for renewed capital inflows are supporting sentiment across the crypto market. Still, investors may need to reassess the liquidity outlook if Warsh places greater emphasis at this FOMC meeting on inflation or balance-sheet reduction.

Markets are also watching BlackRock’s expansion in Bitcoin-related products. Forbes said the upcoming launch of BlackRock’s iShares Bitcoin Premium Income ETF (BITA) is another factor drawing investor interest. The product combines Bitcoin exposure with income from option premiums.

Bitcoin remains far below its $126,000 peak reached in October last year. Still, after defending the $60,000 level, it has recovered to the $66,000 range, leaving markets focused on whether it can retake $70,000 and how the liquidity outlook shifts after the FOMC.