Larry Fink Embraces Bitcoin While Warning Of Volatility

Larry Fink, CEO of BlackRock, acknowledged a change of stance on bitcoin. Long critical of cryptos, he now says he has revised his strategy. At the DealBook Summit organized by the New York Times, he mentioned a notable evolution in his perception of the asset. A symbolic shift, which also reflects the gradual adjustment of the institutional view on cryptos.

From open skepticism to strategic repositioning

Larry Fink has been clear about the extent of the progress made since 2017, when he still associated bitcoin with illicit activities. “My way of thinking is constantly evolving”, he said to journalist Andrew Ross Sorkin during the DealBook Summit, emphasizing the public nature of this turnaround : “it’s a very clear and public example of a major change in my beliefs”.

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

This strategic inflection was translated into a series of concrete initiatives by BlackRock, showing a clear repositioning on these assets:

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

• A record capitalization : IBIT reached an estimated peak of 70 billion dollars, proving massive institutional interest ;

• A leadership posture change : Larry Fink now takes a more nuanced and strategic approach to bitcoin, breaking clearly with his 2017 statements ;

• A desire to structure the crypto market: notably partnering with Coinbase for custody, BlackRock adopts an approach framed and compliant with traditional financial standards.

These elements show BlackRock’s clear intention to no longer ignore cryptos, but to integrate them into a regulated, institutional financial offering.

Between assumed caution and contradictory signals

Despite this strategic shift, Larry Fink tempered his enthusiasm. Still at the conference, he qualified bitcoin as a “fear asset”, meaning an asset linked to periods of geopolitical uncertainty.

He cited as examples the drop in the BTC price on the announcement of a trade deal between the United States and China, or when mentioning a possible resolution of the conflict in Ukraine. According to him, this asset serves more to capture investors’ fears than to reflect fundamental economic dynamics.

He added with lucidity : “if you bought bitcoin with a trading mindset, it’s a very volatile asset. You have to be really good at anticipating market movements, which most people are not”.

These verbal reservations fit into an unstable context for BlackRock’s ETF. After a triumphant launch, IBIT recorded more than 2.3 billion dollars in net outflows in November.

Certain days were particularly marked, such as November 14 with 463 million dollars withdrawn, and November 18 with 523 million. While Cristiano Castro, head of development at BlackRock, recalled that ETFs remain “powerful and liquid instruments”, these flows show that adoption is neither linear nor assured.

BlackRock downplays IBIT outflows, but the signal sent by Larry Fink remains strong. His change in tone confirms the gradual integration of bitcoin in institutional strategies. It remains to be seen whether this inflection will have a lasting impact on market perception or if it is only a tactical adjustment.