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BlackRock’s take on the Bitcoin potential

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Larry Fink, the CEO of BlackRock, the world's leading asset management company, shared his positive views on Bitcoin and blockchain technology in an interview with Fox Business yesterday. He expressed optimism about the potential revolutionary changes that tokenizing assets and securities could bring to the financial industry. Fink believes that the use of blockchain can lead to the reconstruction of banking systems and capital markets, and he considers stablecoins to be a successful example in this domain.

BlackRock, Inc. is an American investment firm and has emerged as the world's premier asset manager, boasting $9.09 trillion in assets under its stewardship as of April 14, 2023.
 

Some highlights

Talking about the benefits of blockchain technology, Fink highlighted its incredible ability to eliminate the need for custody intermediaries who hold assets on behalf of individuals while taking a cut. In his opinion, this innovation  can transform the entire financial landscape.

Speaking about Bitcoin, Fink compared the asset to digital gold but mentioned that he personally did not invest in it. He added: «Bitcoin is an international asset. It’s not based on any one currency, and so it can represent an asset that people can play as an alternative».

 

Bitcoin spot ETF

Fink emphasized BlackRock’s goal of making Bitcoin more accessible, democratized, and cost-effective. In June, the company applied to launch a Bitcoin spot ETF, leading the way for other asset management firms to follow suit. He said, “Right now, the bid-ask spread for crypto is very expensive. It does erode a lot of the returns. We hope our regulators look at these filings as a way to democratize crypto”.

A Bitcoin spot ETF, or Exchange Traded Fund, is a financial instrument that holds Bitcoin on behalf of investors, eliminating the need for them to directly purchase the cryptocurrency. These ETFs are traded on traditional exchanges, not exclusive cryptocurrency platforms. The concept involves a company purchasing real Bitcoin, converting it into a security, and subsequently trading or selling it on an exchange. However, such ETFs are still not available in the US.

Interestingly, but six years ago, the BlackRock CEO held a more skeptical view of cryptocurrencies. In an interview with Bloomberg, he regarded cryptocurrencies as speculative assets and indicators of how much money is laundered in the world.

As for today, Bitcoin has hit new yearly highs, with its price rebounding to $31,500 and currently hovering around $30,500.

 

Also read: What is a spot bitcoin ETF, and why does everyone talk about it?

Maria Kachura
Maria Kachura

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