Bitcoin has had a remarkable price performance this year, outperforming the S&P 500’s 15% year-to-date gain. The price of Bitcoin has climbed by 83% since the start of 2023, with a sizable chunk of that growth taking place after June 15th. When BlackRock, the biggest asset manager in the world, applied for a Spot Bitcoin ETF, prices surged alongside.
BlackRock joined a group of fund managers, including ARC, Invesco, VanEck, and Grayscale, who were all eager to enter the market. However, the Securities and Exchange Commission (SEC), so far, has turned down any applications for a spot Bitcoin ETF, primarily due to concerns about fraud and manipulation.
BlackRock’s reputation and track record have instilled hope within the crypto world, as the company has had an overwhelmingly successful history with its ETF applications. Out of BlackRock’s 576 ETF applications, only one was rejected in 2014. Therefore, the crypto sector eagerly awaits the outcome of BlackRock’s latest filing.
BlackRock and NASDAQ recently resubmitted their application and named Coinbase as the custodial surveillance partner for the Spot Bitcoin Trust in response to the SEC’s requirement that BlackRock designate a surveillance partner to solve these issues.
Larry Fink, Chairman and CEO of BlackRock, emphasized the firm’s dedication to long-term investors and their history of close cooperation with authorities in an exclusive interview with Liz Claman and Charlie Gasparino on Fox Business’ “The Claman Countdown”. Fink expressed hope about working with authorities and addressing their concerns to eventually get permission, even if he couldn’t specify the present submission.
Fink emphasized BlackRock’s commitment to product digitization, noting that ETFs have already transformed the mutual fund sector. His firm believes that tokenizing the assets and securities that Bitcoin symbolizes will further democratize investment. BlackRock wants to make investing more accessible and affordable by offering investors fractional shares.
Fink said: “You know ETF was a big revolution for the mutual fund industry and it’s really taking over the mutual fund industry and we do believe that if we can create. More tokenization of assets and securities, and that’s what Bitcoin is. It could revolutionize again, finance.”
The huge bid-ask spread for cryptocurrencies, which reduces returns and raises transaction costs, is one issue that Fink noted. BlackRock wants to democratize the cryptocurrency industry and lower costs for investors, and to do this; it needs regulatory clearance for Bitcoin ETFs. Fink’s optimistic view of Bitcoin contrasts with his earlier scepticism, brought on by early contact with illegal activity. Fink views Bitcoin as a digital asset that can act as an alternative investment, much like gold, offering a buffer against inflation and currency devaluation as it becomes more widely available.
He added: “Let’s be clear Bitcoin is an international asset it’s not based on anyone currency and so it can represent an asset that people can play as an alternative.”
Regarding the underlying technology, Fink thinks blockchain has a lot of promise to simplify transactions and do away with some financial intermediaries. Fink acknowledges the technology’s growth and potential to improve transaction processes by ensuring transparency and doing away with the need for custodians, even though it has not yet reached its full maturity.
The comments by Fink, founder of the largest asset manager in the world, come as a surprise to many. As recent as a few years ago, his viewpoint on crypto was arguably different and recent comments come as a 180-degree turn. In a CNCB Interview in 2021, he said, “I’m probably more on the Jamie Dimon camp,” referring to the former JPMorgan Chase CEO and Chairman who stated that bitcoin is “worthless.”
