BlackRock CEO Larry Fink Believes Bitcoin Technology Could ‘Revolutionize Finance’
Key Takeaways
- BlackRock CEO Larry Fink believes that tokenization of assets could revolutionize finance
- Along with Invesco, Fidelity and others, BlackRock has filed with the SEC for approval of a spot Bitcoin ETF
- If successful, it would be the biggest ever step in bringing crypto into the traditional financial system
Yeh it’s a big call. And if it was someone like Elon Musk making it, you’d be forgiven for dismissing it as just another headline hungry statement aiming to pump prices. But BlackRock is a serious financial institution.
By some measure the most serious, given that they’re the largest asset manager in the world when it comes to assets under their control. So when the CEO starts talking about Bitcoin in this way, it’s worth at least looking a little closer at the sentiment and what it might mean for investors.
So let’s do just that.
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What did Larry Fink Say?
Fink was interviewed on Fox Business on Wednesday, and was asked where he saw the future for Bitcoin. His reply was pretty emphatic:
“We do believe that if we can create more tokenization of assets and securities — that’s what bitcoin is — it could revolutionize finance. Instead of investing in gold as a hedge against inflation, a hedge against the onerous problems of any one country, or the devaluation of your currency whatever country you’re in — let’s be clear, 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.”
That’s a pretty big departure from a guy who has previously expressed serious skepticism over Bitcoin, stating that it had substantial involvement in the funding of illicit activities.
BlackRock seeks approval for Bitcoin spot ETF
If we’re being cynical, this change of tune could have something to do with the fact that BlackRock is looking to launch a spot Bitcoin ETF. The iShares division of the company filed paperwork with the SEC, along with other big asset managers such as Fidelity and Invesco.
While there are existing ETFs from companies like Greyscale, these are not backed by actual Bitcoin and instead provide exposure to the asset through the futures markets.
If spot Bitcoin ETFs were to be approved, it would likely be a boon for the crypto markets as it would allow for purchases from regulated investment advisors and even pension funds.
The bottom line
Despite some serious ups and downs, crypto continues to stay relevant. Its popularity ebbs and flows, but the longer it remains ‘a thing’ the more its legitimacy grows. If BlackRock or any of the other major asset managers can get the SEC to approve a spot Bitcoin ETF, that will be a big step for the asset class.
For investors, it’s definitely worth keeping an eye on crypto. But as Larry Fink’s comments suggest, the end game is almost certainly that crypto and the blockchain becomes integrated into the traditional financial system, rather than a ‘new world financial order.’
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