BlackRock’s Larry Fink once said that his clients have no interest in crypto. Here’s how things have changed since 2018.

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By Frances Yue and Nicole Lyn Pesce

As BlackRock bids for the bitcoin ETF, here’s how Larry Fink’s comments on cryptocurrencies — which have grown into a $1 trillion market — have changed over time.

BlackRock, the world’s largest asset manager, filed an application for a bitcoin-backed exchange-traded fund in the United States on Thursday.

This is remarkable for several reasons. First, there is currently no such product in the United States. The SEC has approved several bitcoin futures-based ETFs in the past, but it has yet to greenlight anything backed by bitcoin.

Second, BlackRock’s (BLK) filing also represents a sea change in the company’s attitude towards crypto since 2018, when Larry Fink, the company’s chairman and CEO, told Bloomberg that he doesn’t had heard of any client looking on the crypto exposure.

As cryptocurrencies have evolved into a $1 trillion market, here’s how Fink’s commentary on the asset class has changed over time, as well as how BlackRock has expanded its footprint in the cryptocurrency space. digital assets.

In 2017, Fink said the rapid rise of cryptocurrencies “identifies the amount of money laundering that’s going on around the world.”

“I strongly believe in the potential of what cryptocurrencies can do,” Fink said a few years ago, during a Bloomberg interview at the BlackRock Fixed Income ETF conference in New York. He also said that he sees “huge opportunities”, but currently the atmosphere around bitcoin is “more speculative”.

In 2018, during the aforementioned interview with Bloomberg, Fink said that BlackRock was “reviewing” blockchain technologies, but added, “I don’t think any clients have been looking for crypto exposure.”

“I haven’t heard any customers say they were looking to buy cryptocurrency,” he said at the time. And the video clip of that interview was doing the rounds on Twitter on Friday, following news of BlackRock’s filing of a bitcoin ETF.

But then, in 2020, Fink said that while the bitcoin market was still relatively small compared to other markets, there was a possibility that it could evolve into a global market.

“Bitcoin has caught many people’s attention and imagination. Still untested market, quite small compared to other markets,” he said. You see “these big moves of giants every day (in bitcoin)…it’s a narrow market. Can it evolve into a global market? Maybe,” he added.

A few weeks earlier, BlackRock’s director of fixed income investments, Rick Rieder, even speculated that bitcoin might take away some of the shine from gold, perhaps one day rivaling the impeccable stature of the precious metal over the past 5,000 years as a store of value and a hedge against the devaluation of fiat currencies.

Then in 2021, BlackRock filed an application to offer clients exposure to bitcoin futures as a qualifying investment for two of its funds through two funds.

That same year, Fink said in an interview with CNBC that there was “a huge role for a digitized currency,” whether it’s “bitcoin, or whatever, or rather an official digital currency of the government, the digital dollar”.

In March 2022, it looked like BlackRock customers were definitely interested in crypto. Fink wrote in a letter to shareholders that BlackRock is investigating digital currencies, stablecoins and underlying technologies as the company has seen growing interest from customers. Moreover, Fink added that the Russian-Ukrainian war could accelerate the use of digital currencies.

A few months later, in August 2022, BlackRock said it was partnering with Coinbase to offer direct bitcoin access to select institutional customers. Joint customers of Coinbase and BlackRock’s investment management platform Aladdin would have access to crypto trading, custody, prime brokerage and reporting capabilities.

In the same month, BlackRock announced that it was launching a private bitcoin spot trust for institutional clients in the United States.

By November 2022, Circle announced that it would begin transferring the reserves of its stablecoin USDC into a dedicated fund set up by BlackRock and registered with the United States Securities and Exchange Commission.

Which brings us to June 2023, with BlackRock filing an application for a spot bitcoin exchange-traded fund. It will bring in Coinbase Global Inc. to provide custody of the ETF as regulators step up their oversight of the crypto industry. The SEC recently sued crypto exchanges Binance and Coinbase, accusing them of operating unlicensed securities exchanges.

Read: BlackRock applies for spot bitcoin ETF. Here’s why it matters to the crypto industry

-Frances Yue

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(END) Dow Jones Newswire

06-17-23 1114ET

Copyright (c) 2023 Dow Jones & Company, Inc.

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