larry fink - Pwim.Net

BlackRock CEO Larry Fink Says Bitcoin Can Evolve Into Global Asset and Impact Dollar

Larry Fink, the head of the world’s largest asset manager BlackRock sees the potential for Bitcoin and cryptocurrency sector to evolve into a mainstream marketplace. He also noted the impact BTC is having on dollar-based assets internationally.

BlackRock CEO Larry Fink has given a relatively understated endorsement of Bitcoin in a report by CNBC on Dec. 1.

Fink said:

“Bitcoin has caught the attention and the imagination of many people. Still untested, pretty small market relative to other markets.”

Although the Blackrock CEO recognizes that BTC is “seeing big giant moves every day,” Fink maintained it’s a “thin market,” but did not rule out Bitcoin’s potential growth.

While speaking at the Council on Foreign Relations on Dec 1, Fink said:

“Can it (BTC) evolve into a global market? Possibly.”

Fink also noted in the CNBC report that having a digital currency like Bitcoin has a real impact on the US dollar—making it less relevant to international holders of dollar-based assets.

The Blackrock CEO further raised the question that many economists have been pondering in regard to Bitcoin:

“Does it change the need for the dollar as a reserve currency?”

BlackRock holds over $7.4 trillion in assets under management making it the world’s largest asset manager. While Fink’s comments were not overly bullish, the comments are still a positive development for the still-nascent cryptocurrency market and its pioneer Bitcoin. The CEO’s comments also indicate that BlackRock is watching the crypto space very closely.

Notably, institutional adoption is currently driving bullish sentiment in the Bitcoin and crypto space along with major players who have publicly announced major allocations of their portfolios to Bitcoin—such as billionaire hedge fund managers Stanley Druckenmiller and Paul Tudor Jones II and MicroStrategy’s Michael Saylor.

Blackrock CEO Says Low Bitcoin Demand from their Clients

In an interview with CNBC Wednesday, Larry Fink, the BlackRock investment asset management company CEO, said he sees low demand for crypto tokens.

Fink, who in the past stated that digital assets could become a great asset class, admits that he is not seeing a huge demand for cryptocurrencies among long-term investors.

The administrator stated that demand for crypto assets are not part of the focus on retirement and long-term investors. He explained that Blackrock investors are more focused on building long-term returns over a long period of time, and they don’t have conversations about cryptos.

He said there is a low demand for cryptocurrencies among long-term investors like individual retirement accounts (IRA) plans, pension funds, and retirement funds, thus putting cryptocurrencies in a similar class as retail-driven meme stocks.

Although Fink is delighted about investors taking an interest in speculative assets, he said that cryptocurrencies are entirely unrelated to BlackRock’s mission.

He acknowledged that in the past, people had been asking him about Bitcoin and other cryptocurrencies, but no such demands recently he interacted with his clients. “In my last two weeks of business travel, not one question has been asked about that [crypto]. That is just not part of the focus on retirement and long-term investors. We see very little in terms of investor demand on those types of things, but quite frankly (many) may not come to BlackRock for that type of demand,” Fink said.

Blackrock is considered the world’s largest asset manager, holding trillion assets under management worth almost $10 trillion.

Crypto as Business Opportunity

Despite Fink’s scepticism on crypto assets, Blackrock has been positive and demonstrated commitment to crypto investments.

In August 2020, Blackrock indirectly exposed to Bitcoin (by purchasing 21,454 Bitcoins worth $250 million) through its ownership stake in MicroStrategy software company. Such investments made Blackrock the biggest shareholder of MicroStrategy (by holding a 15.24% stake in MicroStrategy during that time).

In April this year, SEC filings indicated that Blackrock made $360,000 on Bitcoin CME futures this year, meaning that the firm had allocated a minimal amount of its total $10 trillion managed assets to Bitcoin futures.

In February, Rick Reider, Blackrock’s chief investment officer of global fixed income, said that the company had begun to dabble in crypto assets. He said that although the volatility of cryptocurrencies is extraordinary, people are looking for a storehouse of value.

Bitcoin and other cryptocurrencies have become increasingly popular with institutional investors, big firms and retail investors alike.

In April, BNY Mellon bank announced that it would begin providing Bitcoin services this year. Various investment banks and asset managers, including Goldman Sachs, Morgan Stanley, Fidelity, and JP Morgan, are working to gain cryptocurrency exposure for their customers. PayPal, Mastercard, and Visa are also working to allow digital assets to be used as payment methods on their systems.

BlackRock CEO Believes Russia-Ukraine War in Boosting Crypto Adoption

BlackRock Chairman and Chief Executive Officer Larry Fink has lent his voice to describe the role of digital currencies in the ongoing war between Russia and Ukraine.

In a letter to Shareholders on Thursday, Larry criticized Russia’s invasion of Ukraine, noting that it has set back about 30 years of globalization efforts.

Of particular note is the acknowledgement of the role of digital currencies which he noted will help many countries record a paradigm shift in their view and approach to the nascent asset class. An excerpt of Larry’s letter reads:

“A less discussed aspect of the war is its potential impact on accelerating digital currencies. The war will prompt countries to re-evaluate their currency dependencies. Even before the war, several governments were looking to play a more active role in digital currencies and define the regulatory frameworks under which they operate,”

As correctly observed, digital currencies came to Ukraine’s aid when the country called for help with more than $30 million contributed by the broader community to support the country’s efforts in repelling Russian forces. From Bitcoin (BTC) to Dogecoin (DOGE), and Non-Fungible Tokens (NFT), the backing the crypto ecosystem gave to the Ukrainian people has not gone unnoticed.

Larry identified the move by many Central Banks to float a digital version of their currencies, a move that is poised to stem the dominance of cryptocurrencies in the emerging payment ecosystem. In Larry’s belief, crypto can help cut down the cost of transactions as well as in remittances. This obvious superior outlook has cemented BlackRock’s resolve to continually embrace digital currency innovations as it has done in time past.

“A global digital payment system, thoughtfully designed, can enhance the settlement of international transactions while reducing the risk of money laundering and corruption,” Larry said, concluding his talk on digital currencies, adding that “Digital currencies can also help bring down costs of cross-border payments, for example when expatriate workers send earnings back to their families.”

BlackRock's iShares Bitcoin Trust Soars, CEO Fink Bullish on BTC Future

The financial world has witnessed a monumental event as BlackRock’s iShares Bitcoin Trust (IBIT) has seen an unprecedented inflow of $13.5 billion within the first 11 weeks of trading. The groundbreaking exchange-traded fund (ETF), which offers investors exposure to Bitcoin without direct ownership of the cryptocurrency, has been setting records, with a daily trading high of $849 million on March 12. This surge in interest is a testament to the growing mainstream acceptance of Bitcoin and its underlying technology.

Larry Fink, CEO of BlackRock, the world’s largest asset manager, has expressed his confidence in Bitcoin’s long-term viability. Fink’s bullish stance on Bitcoin comes at a time when the cryptocurrency market is experiencing renewed interest from institutional investors and traditional financial entities. The launch of IBIT is a significant milestone as it represents the first such initiative by BlackRock, signaling the firm’s commitment to incorporating digital assets into its vast portfolio of investment products.

The remarkable performance of IBIT is not just a win for BlackRock but also a strong indicator of the potential of Bitcoin as a viable investment asset. The trust’s rapid growth can be attributed to several factors, including the increasing demand for digital assets as a hedge against inflation and market volatility, as well as the growing interest from both retail and institutional investors looking for diversified investment vehicles.

While the success of IBIT is notable, it is essential to consider the broader implications of such a development on the cryptocurrency landscape. The endorsement from a financial giant like BlackRock adds legitimacy to Bitcoin and could potentially lead to more widespread adoption. Moreover, the successful launch of the trust may encourage other financial institutions to explore similar offerings, thereby expanding the market for Bitcoin-related investment products.

However, the enthusiasm surrounding Bitcoin and the success of IBIT should be tempered with caution. The cryptocurrency market is known for its volatility, and regulatory uncertainties remain a concern for many investors. As governments and financial regulators around the world grapple with how to approach digital assets, the future of Bitcoin and similar cryptocurrencies could be significantly influenced by regulatory decisions.

In conclusion, the bullish outlook of BlackRock’s CEO Larry Fink and the historic inflow into IBIT underscore the evolving narrative of Bitcoin as a legitimate and valuable component of the modern investment portfolio. As the world’s largest asset manager blazes a trail in the crypto ETF space, the financial community will be closely watching to see how this impacts the broader adoption and integration of digital assets within the traditional investment landscape.