BlackRock CEO Reverses on Bitcoin: ‘I Look at It as Digital Gold’

• Larry Fink recognizes Bitcoin as a legitimate asset class.
• His position five years ago couldn’t have been more different. 
• Investment firm BlackRock is filing for a Bitcoin ETF. 

Major financial institutions are increasingly changing their tune on crypto assets and embracing the new technology. BlackRock , one of the world’s largest asset management firms, has recently shown a significant shift in its stance towards Bitcoin. 

Specifically, the company’s CEO, Larry Fink, once a skeptic, now views Bitcoin as a legitimate financial asset class. What is more, Fink acknowledged he was wrong and compared Bitcoin to digital gold. 

Larry Fink Goes From ‘Proud Skeptic to Bitcoin Bull

Institutional players are increasingly embracing digital assets, especially the oldest and largest among them, Bitcoin. On Monday, July 15, Larry Fink, chairman and CEO of BlackRock, explained to CNBC how his opinion changed. 

"As you know, I was a skeptic. I was a proud skeptic," Fink stated. "I studied it, learned about it, and I came away saying, ‘Okay, my opinion five years ago was wrong."

Fink also explained that he now considers Bitcoin a legitimate asset class akin to digital gold. He emphasized its potential for uncorrelated returns, as Bitcoin does not always rise and fall with other assets like stocks. This makes it advantageous for those who are looking for diversification. 

According to Fink, another factor that makes Bitcoin attractive is its role as a hedge against currency debasement and geopolitical instability. In this sense, Bitcoin functions similarly to gold, rising when monetary and political stability are high. 

BlackRock Expands Bitcoin Involvement

Fink’s reversal on Bitcoin did not leave his company unaffected. In 2024, BlackRock has intensified its efforts in crypto and digital assets. In March 2024, BlackRock unveiled its first tokenized Ethereum network fund; BlackRock USD Institutional Digital Liquidity Fund (BUIDL). This fund aims to leverage asset tokenization, which brings traditional assets to the blockchain. 

In January 2024, BlackRock also launched a spot Bitcoin ETF, which quickly attracted significant investment. The fund aimed to make Bitcoin more accessible to institutional investors and quickly demonstrated the demand. 

The significance of BlackRock’s involvement in crypto is that other major players are following suit. Investment giants such as Fidelity have launched their own investment products, and the largest US bank, JPMorgan, disclosed significant Bitcoin ETF investments. 

On the Flipside

• Bitcoin’s price is notoriously volatile, posing substantial risks for investors. This is a common concern among traditional investors and financial institutions.
• The regulatory landscape for cryptocurrencies is still evolving, especially in the US. The SEC’s harsh stance on crypto is still deterring many traditional investors from getting more involved in this asset class. 

Why This Matters

Institutional endorsements from major players like BlackRock’s Larry Fink can significantly influence investor sentiment. It drives more mainstream acceptance and integration of Bitcoin into traditional finance.

Read more about BlackRock’s plans for Bitcoin: 
BlackRock Hints at Bigger Bitcoin Plans Amid ETF Success

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