Larry Fink: Spearheading Bitcoin Adoption on Wall Street

• BlackRock, Under the Leadership of Larry Fink, Embraces Bitcoin
• Revitalizing the Concept of a Bitcoin ETF
• The Significance of a Bitcoin ETF
• Fink's Perspective on Bitcoin
• BlackRock's Growing Interest in Cryptocurrencies
• BlackRock and Bitcoin: A Promising Future

BlackRock, Under the Leadership of Larry Fink, Embraces Bitcoin

Larry Fink, CEO of BlackRock, the world's largest asset manager, has recently become a significant advocate for bitcoin (BTC). Despite coming late to the bitcoin table, his influence in the industry is hard to deny. Earlier this year, BlackRock stunned the global finance community by applying to launch a bitcoin exchange-traded fund (ETF). Given the company's prominent standing in the world of finance, the move rekindled interest in a crypto trading vehicle that had largely been dismissed as unviable. This amplified interest even though its proposed iShares Bitcoin$42,260 -0.64% Trust is just one of hundreds of ETFs the company manages.

Revitalizing the Concept of a Bitcoin ETF

The concept of a spot bitcoin ETF has been met with hesitation by the U.S. Securities and Exchange Commission due to concerns about market maturity and potential manipulation. BlackRock's interest in the concept, however, has helped legitimize the idea and demonstrate a likely demand for such a product. BlackRock's move has led other traditional financial institutions like Fidelity, Franklin$0.0015 -3.24% Templeton, and VanEck, as well as crypto-centric companies like Bitwise and Hashdex, to follow suit with applications to list their own BTC ETFs.

The Significance of a Bitcoin ETF

A bitcoin ETF holds significant importance as it offers a broader range of institutions the opportunity to gain exposure to BTC. This is achieved by holding shares of products like BlackRock's iShares or WisdomTree's BTCW, rather than bitcoin directly. As a result, both retail and institutional investors have the option to invest in bitcoin through vehicles like a 401(k) or index funds. Increased consumer interest in spot bitcoin ETFs could potentially create increased buying pressure on BTC, leading to higher prices.

Fink's Perspective on Bitcoin

In an interview with Fox Business in October, Fink revealed that BlackRock's clients have shown a growing interest in crypto. He added that BlackRock's offering would democratize access to the asset class. Fink views the recent market momentum as a flight to quality among currencies, predicting that cryptos will outshine global currencies in the coming months.

Fink also highlighted the potential of bitcoin as an open, verifiable, and stateless currency, predicting it could become an increasingly crucial financial instrument. His views, once in line with JPMorgan CEO Jamie Dimon's crypto skepticism, have evolved over time. Fink now sees value in the proposition of bitcoin potentially weakening the U.S. dollar's position as a reserve currency.

BlackRock's Growing Interest in Cryptocurrencies

BlackRock's interest in cryptocurrencies extends beyond just bitcoin. In August 2022, the company announced plans to implement crypto trading on its Aladdin investment platform. They've also filed to list an ETF for Ethereum$2,315 -2.42%'s ether (ETH). The internal reasons behind BlackRock's recent foray into crypto markets remain unclear. However, their filing, which assigned Coinbase as a third-party service provider, may have found a solution to the SEC's market surveillance requirements that many other applicants have emulated.

There is speculation about a possible private communication between Fink and SEC Chair Gary Gensler regarding an ETF listing. This leads to the assumption that Fink may be acting on an anticipatory basis, expecting an ETF to be approved sooner rather than later.

BlackRock and Bitcoin: A Promising Future

Regardless of whether BlackRock is the first to market with its iShares bitcoin ETF, Fink's belief in the value of bitcoin is evident. This shift towards embracing cryptocurrencies is noteworthy, indicating that legacy finance institutions are increasingly recognizing the potential inherent in blockchain technology, particularly for the tokenization of real-world assets like stocks and bonds.

Edited by Jonathan Stoker