Why understanding BlackRock’s influence on the Fed matters for crypto investors and the dollar's future
The world of money is shifting fast. BlackRock, the global asset manager, is quietly becoming a central player in how the Federal Reserve operates. This shift has huge implications for the US dollar, interest rates, and crypto assets like Bitcoin. In this article, you'll learn why BlackRock’s growing role in the Federal Reserve is crucial, how the dollar's value is being squeezed, and why investors are turning to Bitcoin as a hedge. We’ll also cover why stablecoins might take center stage over Bitcoin as a reserve currency and what this all means for your portfolio.
Why BlackRock’s Influence Over the Fed is a Game-Changer
BlackRock isn’t just a big asset manager. It owns about 22% of the Federal Reserve's shares through various channels and has deep ties to the US financial and military-industrial complex. This influence allows BlackRock to shape monetary policy indirectly, far beyond what the president or Congress can do.
- BlackRock’s chief investment officer is often named as a potential Federal Reserve chair nominee — a massive signal of private sector control.
- Major banks like JP Morgan, Bank of America, and Wells Fargo actually call the shots behind the scenes.
- BlackRock is also heavily invested in Bitcoin, mining metals, and rare earths, showing a strategic bet on future value stores amidst inflation.
This level of control means that policies like interest rate adjustments and quantitative easing (money printing) serve Wall Street’s interests first, not average Americans.
The Fed, Interest Rates, and the Decline of the Dollar
Interest rate cuts weaken the US dollar by making borrowing cheaper, encouraging more money printing. This “low-rate” environment reduces the dollar’s purchasing power and sparks inflation—a trend CZ highlights from his own 13-year Bitcoin holding experience.
- Trump’s push for 1% interest rates aligns with pressure to weaken the dollar further.
- Inflation erodes the real value of assets tied to fiat currency.
- The DXY index, often cited to track the dollar, can be misleading—it measures the dollar against other weak currencies rather than true purchasing power.
Data Callout:
Since 1980, the US dollar has lost roughly 70–80% of its purchasing power due to inflation. For example, silver's $50 price in 1980 is equivalent to about $210 today when adjusted for inflation.
Why Bitcoin Beats Gold and Other Assets as Inflation Hedge
Bitcoin’s fixed supply (21 million coins) is deflationary, unlike the ever-expanding fiat supply. While gold increased 4x since 2017, Bitcoin surged about 30x in the same period—making it a superior hedge against inflation.
- Holding Bitcoin protects purchasing power better than traditional assets.
- Younger generations, like Millennials, prefer Bitcoin and Ethereum, seeing them as smarter wealth stores compared to bonds or stocks.
- Institutional investors, after loading up Bitcoin bags, may signal a coming price explosion.
Will Bitcoin Replace the US Dollar as the Global Reserve Currency?
Despite hype from voices like Tucker Carlson, Bitcoin is unlikely to replace the US dollar anytime soon.
- The Federal Reserve won’t allow control over the global reserve currency to slip to a decentralized asset like Bitcoin.
- Instead, the replacement is more likely to be a government-backed stablecoin with closed-source blockchain technology.
- This new stablecoin model aligns with institutional and governmental appetite for control, regulation, and stability.
Answer Box:
Will Bitcoin replace the US dollar as the global reserve currency?
No, Bitcoin is unlikely to replace the US dollar as the global reserve currency. More probable is the rise of a government-issued stablecoin on a closed-source blockchain, which offers more regulatory control and aligns with central bank interests.
The Wealth Gap and The Coming Transfer of Assets
The structural shift in wealth between generations is creating a new investment dynamic. Boomers own about $78 trillion in assets, while Millennials hold only $14 trillion.
- Millennials are less interested in traditional bonds and stocks, often unable or unwilling to hold these assets long term.
- Instead, they’re gravitating towards digital assets like Bitcoin and Ethereum.
- This generational shift could accelerate the adoption and acceptance of crypto as a mainstream asset class.
Risks and What Could Go Wrong
- BlackRock’s dominance raises systemic risks; its decisions could amplify financial crises.
- The Federal Reserve’s policies may continue to induce inflation, hurting everyday savers but benefiting large holders.
- Stablecoins backed by governments might limit crypto’s decentralization benefits.
- Regulatory crackdowns could impact the speed and scale of crypto adoption.
- A sudden market correction in Bitcoin or metals could cause losses for late investors.
Actionable Summary
- BlackRock controls a significant chunk of the Federal Reserve and influences monetary policy primarily in favor of Wall Street.
- Low interest rates and ongoing money printing weaken the US dollar’s purchasing power, fueling inflation.
- Bitcoin’s fixed supply makes it a better inflation hedge than gold or fiat assets.
- Despite speculation, Bitcoin won’t replace the dollar as a reserve currency; a government-issued stablecoin likely will.
- Millennials prefer crypto assets over traditional bonds or stocks, signaling a generational shift in wealth storage.
Want to Stay Ahead?
For deep dives on Fed moves, top crypto picks, timely risk alerts, and model portfolio strategies, get the full playbook in today’s Wolfy Wealth PRO brief. Stay informed and ready for the next big market move.
FAQ
Q1: Why doesn’t the President actually control the Federal Reserve?
The Fed operates independently from the government to prevent political interference in monetary policy. Major banks and asset managers like BlackRock exercise indirect but strong influence.
Q2: How does lowering interest rates hurt the dollar?
Lower interest rates encourage borrowing and money printing, which increases currency supply and decreases its value, leading to inflation.
Q3: Why might a government stablecoin replace Bitcoin as a reserve currency?
Governments prefer stablecoins for control, regulation, and stability, which decentralized Bitcoin can’t offer.
Q4: What makes Bitcoin a better inflation hedge than gold?
Bitcoin’s fixed total supply (21 million coins) prevents inflation due to supply expansion, unlike gold and fiat currencies.
Q5: How is the Bitcoin holding trend different for Millennials?
Millennials tend to prefer crypto assets over traditional stocks and bonds as wealth stores, reflecting changing financial priorities and trust in decentralized assets.
Disclaimer: This article is for informational purposes only and doesn’t constitute financial advice. Crypto investments carry inherent risks and you should consult a professional advisor.
By Wolfy Wealth - Empowering crypto investors since 2016
Subscribe to Wolfy Wealth PRO
Disclosure: Authors may be crypto investors mentioned in this newsletter. Wolfy Wealth Crypto newsletter, does not represent an offer to trade securities or other financial instruments. Our analyses, information and investment strategies are for informational purposes only, in order to spread knowledge about the crypto market. Any investments in variable income may cause partial or total loss of the capital used. Therefore, the recipient of this newsletter should always develop their own analyses and investment strategies. In addition, any investment decisions should be based on the investor's risk profile
