BlackRock CEO publicly admits his mistake: Bitcoin is not only a crime, it is a highly volatile fear asset
BlackRock CEO Larry Fink made a public shift at the DealBook Summit hosted by The New York Times, detailing to reporter Andrew Ross Sorkin how his views on cryptocurrencies have fundamentally shifted in eight years.
(Preliminary summary: BlackRock's most successful ETF issuance in history: IBIT raises US$50 billion, Bitcoin 2025 challenges gold status)
(Background supplement: BlackRock Bitcoin ETF "IBIT" earns more than all its funds, and more than the S&P 500 ETF that is ten times larger)
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BlackRock CEO Larry Fink at the DealBook hosted by the New York Times The summit marked a dramatic public shift in stance. Sitting alongside Coinbase CEO Brian Armstrong on stage, Fink detailed to reporter Andrew Ross Sorkin how his views on cryptocurrencies have fundamentally shifted in eight years.
Fink candidly described his transformation from directly linking Bitcoin to money laundering in 2017 to now leading the world's largest spot Bitcoin exchange-traded fund (ETF).
A very visible public example of a major shift in my thinking...my thought process is constantly evolving.
BlackRock IBIT Results: Eight Years from Criticism to Embrace
In October 2017, Fink said sarcastically that Bitcoin "shows how big the global need for money laundering is." The comment fully reflected Wall Streetβs prevailing view of cryptocurrencies at the time, which viewed the space as primarily driven by criminal activity and illicit money transfers. Many institutional investors have stayed away from Bitcoin, believing it to be too risky and lacking practical applications.
In the ensuing eight years, the market environment, regulatory framework and institutional participation have all changed dramatically. Bitcoin has gradually evolved from a fringe asset to a financial instrument taken seriously by institutional investors, hedge funds and asset management companies. BlackRock itself made a strategic shift, ultimately recognizing that Bitcoin and spot ETFs represented significant business opportunities and customer demand.
BlackRock received regulatory approval from the U.S. Securities and Exchange Commission (SEC) in January 2024 to launch one of the first spot Bitcoin ETFs. The companyβs iShares Bitcoin Trust ETF (ticker: IBIT) has achieved amazing results since its launch, setting multiple records in the asset management industry.
IBITβs outstanding performance includes cumulative net inflows of more than $50 billion (by the end of 2024) and peak assets of approximately $70 billion, making it the largest Bitcoin spot ETF on the market. Its growth rate has set a record of the fastest growth in the history of BlackRock ETF issuance, five times that of the company's second-largest ETF. Even more strikingly, IBIT's gains have now outstripped every other ETF owned by BlackRock, including the S&P 500 ETF (IVV), which is ten times larger.
The integration of traditional finance into cryptoassets
Finkβs attitude reflects BlackRockβs strategic decision as one of the worldβs largest asset managers, which saw continued client demand for Bitcoin exposure and decided to meet that demand by launching a spot ETF. Coinbase CEO Brian Armstrong attended the DealBook Summit side by side with Fink, focusing on topics such as tokenization and the future of money. The cooperation itself is very symbolic, representing the transformation of Bitcoin from a stigmatized fringe asset to a legitimate investment option that can be included in institutional investment portfolios, pension funds and individual retirement accounts.
The worldβs largest traditional financial institution appears side by side with the largest crypto exchange in the United States, which represents the deepening trend of integration in the traditional finance and crypto fields. In addition to BlackRock, other major asset managers such as Grayscale, Bitwise, Fidelity, ARK 21Shares, Invesco Galaxy and VanEck have launched their own spot Bitcoin ETF products, marking a turning point as Bitcoin ETFs have become mainstream financial products.
Bitcoin is a "fear asset"
But even so, Fink has not completely turned into a staunch supporter of Bitcoin. Instead, he described Bitcoin as βan asset of fearβ at the DealBook Summit. He noted that Bitcoin prices fell on announcements of a U.S.-China trade deal and a possible end to the war in Ukraine.
If you are buying Bitcoin for trading, it is a very volatile asset. You have to be really good at market timing, and most people are not good at that.
This comment shows that Fink has a more nuanced and pragmatic view of Bitcoin - although he acknowledges the importance of Bitcoin, he does not view it as a risk-free long-term investment, but rather a highly volatile asset that requires professional management.
Long-term challenges and market dynamics
Nonetheless, IBITβs net outflows in November are also a reminder that institutional investorsβ interest in Bitcoin is not unconditional. When market conditions change, geopolitical risks ease, or macroeconomic policies shift, investors will quickly adjust their positions.
IBIT also experienced significant net outflow challenges in November 2024. Cumulative net outflows for the month reached $2.3 billion, with the largest single-day outflows including $463 million on November 14 and $523 million on November 18. However, Cristiano Castro, director of commercial development at BlackRock, said in response to the net outflows that the asset manager remained confident in the ETF as a "liquid and powerful instrument". Despite the outflows, IBIT still accounts for 45% of the global spot Bitcoin ETF market share.
When traditional financial institutions accept Bitcoin, governments and regulators are also more likely to incorporate it into formal financial frameworks. This could lead to clearer tax policy, stronger consumer protection and overall market standardization. Over time, Bitcoin may evolve from a pure risk asset to a standard allocation in traditional investment portfolios.
