BlackRock CEO Explains Why He’s No Longer a Bitcoin Skeptic

BlackRock CEO Larry Fink on Monday discussed why he was wrong to be a Bitcoin and crypto skeptic before properly studying the asset class.

His firm’s recently released second-quarter results showed record AUM of $10.65 trillion for the investment manager, thanks in no small part to inflows into its Bitcoin ETF product launched in January.

Larry Fink’s Bitcoin Awakening

“As you know … I was a proud skeptic,” Fink said during an interview with CNBC’s Jim Cramer on Monday. “I studied it, I learned about it, and I came away saying, OK, my opinion five years ago was wrong.”

In 2017, Fink referred to Bitcoin as a “money laundering index”, considering it the only real use case for Bitcoin. SkyBridge Capital co-founder Anthony Scaramucci has claimed he met Fink in 2021, who at the time still called Bitcoin “stupid”.

Two years later, the entire crypto industry was hit by lawsuits from the Securities and Exchange Commission (SEC), whose chairmanship has a view on Bitcoin that mimics Fink’s old perspective to this day. However, it was just weeks after the SEC filed back-to-back lawsuits against Coinbase and Binance that BlackRock introduced its June 2023 iShares Bitcoin Trust (IBIT), now the world’s largest Bitcoin ETF.

According to Fink, Bitcoin is a “legitimate financial instrument” that can offer uncorrelated returns, even if its technology can sometimes be used nefariously.

“I think it’s an instrument you invest in when you’re most afraid,” he continued. That includes when one fears that one’s country is rapidly debasing its currency through excessive deficits, which “some countries are,” he said.

Escape the financial system

He also claimed that it allows incumbents to invest outside of their government’s control giving them more financial independence.

“I’m a big believer that there is a role for Bitcoin in wallets,” he concluded. “I think there’s a huge industrial use for it and I think a lot of people are missing that.”

As of Friday, BlackRock’s Bitcoin ETF held $18.3 billion in Bitcoin on behalf of clients, eclipsing former king Grayscale’s $15.7 billion AUM.

According to this figure, IBIT has enjoyed $4.4 billion since the end of the first quarter, even though the price of Bitcoin has fallen 14% since then. In total, BlackRock received $82 billion in new inflows across all asset types in the second quarter.

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