In a recent CNBC interview, Larry Fink, CEO of BlackRock, the world’s largest asset management firm with $10.6 trillion under management, admitted he was wrong about Bitcoin. Fink now describes the cryptocurrency as “digital gold” and a “legitimate financial instrument.”
From Skeptic to Advocate
During the interview with CNBC’s Jim Cramer, Fink confessed, “I was a skeptic, a proud skeptic.” However, after studying the decentralized asset, he changed his perspective. “It is a legitimate financial instrument that allows you to maybe have uncorrelated type of returns. I believe it is an instrument that you invest in when you’re more frightened,” he explained. Fink emphasized Bitcoin’s role as a safeguard against currency debasement and economic instability.
Bitcoin as a Safe Haven
Fink highlighted the potential for Bitcoin to offer individuals in economically and politically unstable countries an investment option beyond their geographies. This recognition of Bitcoin’s utility marks a significant shift in Fink’s views.
Bitcoin’s current price action. Source: TradingView
BlackRock’s Bitcoin ETF Dominance
In May, BlackRock’s iShares Bitcoin Trust (IBIT) surpassed the Grayscale Bitcoin Trust (GBTC) as the world’s largest Bitcoin exchange-traded investment fund. As of July 15, IBIT’s year-to-date inflows topped $18 billion. BlackRock has also integrated Bitcoin ETF shares into its Strategic Income Opportunities Fund (BSIIX) and Strategic Global Bond Fund (MAWIX), showcasing Bitcoin’s potential to benefit income-focused investors, including retirees.
Record Inflows and Market Reaction
CoinShares’ data released on July 15 revealed that Bitcoin investment vehicles experienced their fifth-highest week of inflows, recording over $1.35 billion in weekly investments. Fink’s positive remarks, combined with the German government’s final Bitcoin sale, which alleviated market pressure, contributed to Bitcoin’s price rally. The cryptocurrency rose for four consecutive days, with the nine-day exponential moving average crossing over the 200-day exponential moving average, reversing weeks of negative price action and pushing Bitcoin above the $60,000 mark.
Conclusion
Larry Fink’s endorsement of Bitcoin as “digital gold” underscores the growing acceptance of cryptocurrencies in traditional finance. BlackRock’s significant investment and strategic integration of Bitcoin into its funds further highlight the asset’s legitimacy and potential for mainstream adoption.
