April 19, 2024

Is Larry Fink Wall Street’s Biggest Bitcoin Believer?

Larry Fink is BlackRock’s CEO. BlackRock is the world’s largest asset manager, currently managing over $10 trillion in client assets. With massive inflows comes enormous influence.

Influencing Corporate Policy

BlackRock and Vanguard have a history of influencing Fortune 500 policy, especially over the past 15 years. Their influence is highlighted by Vivek Ramaswamy in his books Woke, Inc.: Inside Corporate America’s Social Justice Scam and Capitalist Punishment: How Wall Street Is Using Your Money to Create a Country You Didn’t Vote For.

BlackRock and Vanguard are two of the biggest shareholders of Fortune 500 companies due to the shares they own within their ETFs and mutual funds. In the past, they’ve forced companies to bow to their agenda, with the most notable examples being:

Larry Fink’s 180 on Bitcoin

Larry Fink’s newest and biggest agenda is bitcoin. But his path to his current positive outlook on digital assets has been winding.

In November of 2018, Larry Fink stated that BlackRock wouldn’t offer a cryptocurrency ETF until the industry proved to be legitimate. He went on to say, “I do see one day where we could have electronic trading for a currency that could be a store of wealth. But right now the world doesn’t need a store of wealth unless you need that store of wealth for things you should not be doing.”

In October of 2021, Fink publicly stated on CNBC, “I’m probably more in the Jamie Dimon camp.” Jamie Dimon, CEO of JPMorgan Chase, has been and still is one of the most staunch opponents of digital assets. In December of 2023 during a Senate Banking Committee hearing, he shared, “I’ve always been deeply opposed to crypto, bitcoin, etc. The only true use case for it is criminals, drug traffickers … money laundering, tax avoidance. If I was the government, I’d close it down.”

In June of 2023, BlackRock shocked the finance world when it was reported that they were working with Coinbase to file a spot bitcoin ETF.

In October of 2023, Fink responded to bitcoin’s rally after ETF rumors swirled with, “I think it’s just an example of the pent-up interest in crypto. We are hearing from clients around the world about the need for crypto.”

On January 12, 2024, (just 2 days after BlackRock’s spot bitcoin ETF was approved) Fink stated that bitcoin is “no different than what gold represented for thousands of years. It is an asset class that protects you.”

On March 5, 2024, BlackRock’s spot bitcoin ETF (IBIT) broke net inflows record, with $788.3 million entering the fund in just one day. This meant that BlackRock had to buy over 11,000 bitcoin, which was a major factor in bitcoin hitting a new all-time high on the same day.

larry fink blackrock Source: Fabrice Coffrini/Agence France-Presse/Getty Images

Why Might Fink’s About-Face Be Significant?

What is to stop BlackRock from forcing public companies to adopt bitcoin as a treasury asset?

Going one step further, what if they push companies to copy Michael Saylor’s strategy at MicroStrategy?

Mark-to-market accounting on digital assets may make it more attractive for companies to buy bitcoin. For more on this, please check out our recent article, “FASB’s Digital Asset Rule Change for Corporate Cash Management.”

Vanguard’s CEO Tim Buckley was previously against investors accessing bitcoin. Less than 2 months after the first Bitcoin ETFs launched, he’s stepping down.

A scenario where BlackRock and Vanguard flex their shareholder muscle around corporate bitcoin adoption just got more likely…

The Future of Finance is Being Rewritten

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Investment advisory services offered through Crossover Capital Brands, LLC (dba Crossover Capital), a Registered Investment Advisor with the U.S. Securities and Exchange Commission.

This material is intended for informational purposes only. It should not be construed as legal or tax advice, and is not intended to replace the advice of a qualified attorney or tax advisor. This information is not an offer or a solicitation to buy or sell securities. The information contained may have been compiled from third party sources, and is believed to be reliable.

Alternative investments – such as hedge funds and private equity/venture capital funds – are speculative and involve a high degree of risk. Likewise, the emergence of digital assets comes with its own speculative characteristics and involves a high degree of risk. Various digital assets have unique features, and the regulatory risk environment continues to change as governance requirements, rules, and lawsuits emerge. There may be material differences in the type of marketplaces available for digital assets, and there could be significant restrictions or limitations on withdrawing from or transferring these types of investments. Digital assets may incur higher fees when compared to traditional assets, and these expenses may offset returns.

Crossover Capital may not be able to independently verify digital asset valuations provided by institutions that hold or offer digital asset services. As a result, Crossover Capital will generally rely on information reported to it by third parties. As such, the information contained herein is for informational purposes. Clients should recognize that they may bear digital asset-based fees and expenses at the manager-level, as well as indirect fees, expenses, and performance-based compensation for digital assets. Spot bitcoin exchange-traded products were recently approved for listing and trading by the SEC. However, such approvals do not indicate SEC approval to use or invest in bitcoin. Clients should remain cautious and aware of the various risks associated with digital assets that have a value tied to bitcoin or other crypto related products.

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