Larry Fink, CEO of BlackRock, has made a surprising declaration, calling Bitcoin digital gold. This marks a significant shift in strategy for BlackRock, the world’s biggest hedge fund, which currently manages $10.6 trillion in assets. BlackRock also holds the largest Bitcoin investment fund, making Fink’s statement particularly noteworthy.
At the start of 2024, BlackRock saw record inflows into its exchange-traded funds (ETFs), helping it surpass the $10 trillion mark in assets under management (AUM). The company now boasts over $10.6 trillion in AUM, a $1.2 trillion increase from the previous year. According to Larry Fink, this growth is partly due to the rising popularity of ETFs.
Fink highlighted in the asset manager’s quarterly earnings report, “Organic growth was driven by private markets, retail active fixed income, and surging flows into our ETFs, which had their best start to a year on record.” These strong inflows into ETFs, including the iShares Bitcoin Trust (IBIT), underscore BlackRock’s significant role in the financial markets. The IBIT holds over $19.4 billion worth of Bitcoin (BTC), commanding a 35.2% market share among all US Bitcoin ETFs, as reported by Dune.
The firm’s influence doesn’t stop there. BlackRock’s substantial purchasing power means its buying and selling actions can significantly affect Bitcoin’s price. This was evident when Bitcoin ETF inflows turned positive after three weeks of outflows, aiding Bitcoin’s price recovery above the $60,000 mark.
Larry Fink: ETF Inflows and Market Movements
In the second quarter of 2024 alone, investors purchased $83 billion worth of BlackRock ETF shares, pushing the total for the year to over $150 billion. This surge in ETF inflows contributed to an 8% year-over-year increase in revenue and an 11% increase in operating income for BlackRock. Larry Fink attributes this growth to BlackRock’s “longstanding relationships with corporates and governments.” He explained, “These relationships differentiate BlackRock as a capital partner in private markets, driving unique deal flow for clients. We have strong sourcing capabilities, and we are transforming our private markets platform to bring even more benefits of scale and technology to our clients.”
Advertisement Banner
Moreover, the US spot Bitcoin ETFs recorded their second consecutive week of net positive inflows, totalling over $414 million, according to Dune data. BlackRock saw the largest inflows among all ETF issuers on July 12, with over $120 million worth of investments, as reported by Farside Investors. During this period, Bitcoin experienced its fifth-largest weekly inflow on record, amounting to over $1.35 billion. Conversely, short Bitcoin-related investment products saw their largest weekly outflows since April 2024, totalling over $8.6 million.
These trends indicate a growing confidence in Bitcoin, further bolstered by Larry Fink’s recent endorsement of the cryptocurrency as digital gold. This endorsement may drive more institutional investors towards Bitcoin, considering BlackRock’s prominent position in the financial world.
Larry Fink’s declaration that Bitcoin is digital gold represents a notable turnaround for both him and BlackRock. This perspective aligns with the broader market sentiment that views Bitcoin as a store of value similar to gold. As the largest asset manager globally, BlackRock’s shift towards embracing Bitcoin could have profound implications for the cryptocurrency market.
Fink’s change of heart also reflects a broader trend among institutional investors, who increasingly recognise the potential of cryptocurrencies like Bitcoin and Ethereum (ETH) as valuable assets. This growing acceptance is likely to influence the market positively, encouraging more investments and potentially leading to further price appreciation.
In summary, BlackRock’s record ETF inflows and substantial holdings in Bitcoin highlight the firm’s pivotal role in the evolving financial landscape. Larry Fink’s recent comments on Bitcoin reinforce this position, signalling a significant shift in how traditional financial institutions view cryptocurrencies.
By embracing Bitcoin (BTC) as digital gold, Larry Fink and BlackRock are paving the way for broader acceptance and integration of cryptocurrencies in mainstream finance. This shift enhances BlackRock’s portfolio and reinforces the growing legitimacy of Bitcoin and other digital assets in the eyes of both retail and institutional investors.
Stay connected to The BIT Journal for more updates on these developments.
