BlackRock CEO Calls Bitcoin a Fear Asset

Larry Fink, CEO of BlackRock, acknowledged a change in stance on bitcoin. Long critical of cryptos, he now claims to have reviewed his strategy. During the DealBook Summit organized by the New York Times, he spoke of a notable evolution in his perception of assets. A symbolic shift, which also reflects the gradual adjustment of the institutional view of cryptos.

From open skepticism to strategic repositioning

Larry Fink has been clear about how far he has come since 2017, when he still associated bitcoin with illicit activities. “My way of thinking is constantly evolving”did he declared facing journalist Andrew Ross Sorkin during the DealBook Summit, emphasizing the public nature of this change of heart: “this is a very obvious and public example of a big change in my beliefs”.

Indeed, the one who once saw in bitcoin a “money laundering index” is now at the head of the iShares Bitcoin Trust (IBIT), one of the very first spot Bitcoin ETFs approved by the SEC in January 2024.

This strategic shift resulted in a series of concrete initiatives from BlackRock, reflecting a clear repositioning on these assets:

• The launch of the iShares Bitcoin Trust (IBIT): approved in early 2024 by the SEC, this financial product has become one of the largest spot Bitcoin ETFs on the market;

• Record capitalization: IBIT reached a peak estimated at $70 billion, proof of massive institutional interest;

• The change in leadership posture: Larry Fink today assumes a more nuanced and strategic approach towards bitcoin, in a clear break with his statements in 2017;

• A desire to structure the crypto market: by partnering in particular with Coinbase for conservation, BlackRock adopts a supervised approach, consistent with the standards of traditional finance.

These elements mark a clear desire by BlackRock to no longer ignore cryptos, but to integrate them into a regulated and institutional financial offering.

Between assumed caution and contradictory signals

Despite this strategic shift, Larry Fink has qualified his enthusiasm. Also during the conference, he called bitcoin “active fear”i.e. an asset linked to periods of geopolitical uncertainty.

He cited as an example the fall in the price of BTC upon the announcement of a trade agreement between the United States and China, or when mentioning a possible settlement of the conflict in Ukraine. According to him, this asset serves more to capture investor fears than to reflect fundamental economic dynamics.

He adds lucidly: “If you bought bitcoin for trading purposes, it is a very volatile asset. You have to be really good at anticipating market movements, which most people are not”.

These verbal reservations come amid an unstable context for the BlackRock ETF. After a triumphant launch, IBIT recorded more than $2.3 billion in net outflows in the month of November.

Some days were particularly notable, such as November 14 with $463 million in withdrawals, or November 18 with $523 million. If Cristiano Castro, director of development at BlackRock, recalled that ETFs remained “powerful and liquid instruments”these flows show that adoption is neither linear nor acquired.

BlackRock downplays IBIT's exits, but the signal sent by Larry Fink remains strong. Its change of tone confirms the progressive integration of bitcoin into institutional strategies. It remains to be seen whether this change will have a lasting impact on market perception or if it is only a tactical adjustment.