BlackRock CEO Wall Street’s Biggest Bitcoin Enthusiast

BlackRock CEO is Wall Street's Leading Proponent of Bitcoin

Author: Daniel Kuhn, Coindesk Translation: Shanouba, LianGuai

This year, BlackRock, through CEO Fink’s strong statements about the importance of Bitcoin as an international currency, has reignited people’s interest in Bitcoin ETFs.

ETF Structure Could Drive Bitcoin Price Increase

CEO Larry Fink of BlackRock, the world’s largest asset management company, may be a “late fan” of Bitcoin, but he has become one of its most influential evangelists. This year, BlackRock’s move to apply for the launch of a Bitcoin Exchange Traded Fund (ETF) shocked the world, rekindling interest in this once-considered “dead-end” cryptocurrency trading tool. Even if BlackRock’s iShares Bitcoin Trust is approved, it is only one of several hundred ETFs managed by the company, but its unexpected move still has a significant impact on the market.

Over the years, the U.S. Securities and Exchange Commission (SEC) has been hesitant to approve ETFs that directly hold Bitcoin, partly out of concern for market maturity and manipulation risks. (There are ETFs in the U.S. that track Bitcoin futures, but a direct Bitcoin ETF would provide investors with a more direct exposure to Bitcoin.) As a leading institution on Wall Street, BlackRock’s pure interest alone has boosted the legitimacy of this product and indicated that there may be demand in the market for such products. Since then, traditional financial institutions such as Fidelity, Franklin Templeton, and VanEck, as well as native crypto companies like Bitwise and Hashdex, have also submitted their own applications for Bitcoin ETFs to be listed.

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ETF Structure Could Drive Bitcoin Price Increase

The importance of a Bitcoin ETF is that it will provide a way for a wider range of institutions to access Bitcoin. For example, by holding shares of BlackRock’s iShares or WisdomTree’s BTCW, rather than directly holding Bitcoin itself. This means that retail and institutional investors can invest in Bitcoin through 401(k) plans or index funds. Additionally, if consumers are interested, the structure of a spot Bitcoin ETF could increase buying pressure on Bitcoin and potentially drive up prices.

In an interview with Fox Business in October, Fink stated that BlackRock’s clients have shown increasing interest in cryptocurrencies and that BlackRock’s products will “democratize” access to this asset class. He also described the recent market momentum as a “currency hedge” and said that in the coming months, cryptocurrencies will “overtake” global currencies.

More importantly, Fink stated that Bitcoin, as an open, verifiable, and borderless currency, may become an increasingly important financial tool. It is worth noting that Fink was once considered part of the “Jamie Dimon camp” – the CEO of JPMorgan Chase is a well-known crypto skeptic – and had previously stated that the world does not need “a new international currency”. Some of his views remain consistent; Fink also stated that Bitcoin could undermine the status of the US dollar as a reserve currency, but now he sees the value of this proposal.

Fink’s transformation is worth noting, as it comes at a time when many traditional financial institutions are reevaluating blockchain, especially for the “tokenization” of “real world assets” like stocks and bonds. In contrast, he is more interested in the cryptocurrency itself. In August 2022, BlackRock announced plans to trade cryptocurrencies on its Aladdin investment platform. BlackRock has also applied for an ETF based on Ethereum (ETH) to be listed.

While the motivation behind BlackRock’s entry into the Bitcoin market is understandable, the specific operational mechanisms are still unknown. BlackRock’s application is remarkable because it may have found a way to meet the market regulatory requirements of the U.S. Securities and Exchange Commission (SEC), a method that many other applicants have tried to emulate. Some speculation suggests that Fink and SEC chairman Gary Gensler have had private discussions about the listing of the ETF, and Fink is optimistic that it will be approved soon based on reasonable expectations.

Regardless of whether BlackRock’s iShares Bitcoin ETF is launched, Fink clearly believes in the value of Bitcoin.

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