BlackRock's Larry Fink experiences a "change of heart," advocates crypto as digitized gold

Larry Fink, the CEO of BlackRock, has changed his tune on cryptocurrencies. The world's biggest asset manager has recently filed a second application for a Bitcoin spot market ETF.

Crypto digitized gold

BlackRock's CEO Larry Fink has experienced an astonishing change of heart on crypto. He evolved from calling Bitcoin "an index of money laundering in 2017" to comparing cryptucurrencies to gold. "The role of crypto is digitizing gold in many ways," he said in an interview with Fox Business. BlackRock's executive also suggested that investors could buy Bitcoin instead of gold to hedge against inflation.

That's a big change of tune from Fink's 2017 statement that "Bitcoin just shows you how much demand for money laundering there is in the world." Fink voiced his sentiment nearly right after JPMorgan Chase CEO Jamie Dimon called crypto owners "stupid" and declared Bitcoin a "fraud" being "worse than tulip bulbs." Dimon has been consistent in his views, repeating his opinion on Bitcoin as a "hyped-up fraud" a few months ago and calling crypto "a decentralized Ponzi scheme."

BlackRock reapplies for Bitcoin spot market ETF

Fink's new take on crypto may have something to do with BlackRock's filing in mid-June for a Bitcoin spot market exchange-traded fund (ETF). The company refiled the application after the SEC found flaws in its initial filing. If BlackRock gets the clearance, its Bitcoin spot ETF would be the first to enter the market.

According to the amended filing, BlackRock's ETF would heavily rely on Coinbase, the largest U.S.-based cryptocurrency exchange. The platform would serve as the custodian and provide spot market data for pricing. BlackRock also intends to enhance market surveillance with a bilateral surveillance-sharing agreement between Nasdaq and Coinbase, designed to augment the exchange's existing market surveillance system.

The news of BlackRock's filing drove Bitcoin's price up by around 20% since mid-June. The cryptocurrency still benefits from the uplift in market moods, despite the SEC's rejection of the initial filing.

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BTC exchange rate
Source: Google

SEC doesn’t take kindly to crypto spot ETFs due to fraud concerns

Registering a Bitcoin spot ETF has been a long-standing challenge for asset managers. The regulator has been unwilling to grant clearances in this compartment due to concerns over potential fraud and manipulation. As a result, no application has been approved so far.

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BlackRock took an interest in crypto already in 2022, with Larry Fink admitting to making forays into the industry. "BlackRock is studying digital currencies, stablecoins, and the underlying technologies to understand how they can help us serve our clients," he wrote in his annual letter to the company's shareholders.

In September 2022, BlackRock has launched a crypto- and blockchain-focused ETF in Europe. The fund tracks the NYSE FactSet Global Blockchain Technologies Capped Index, composed of crypto-oriented companies and is listed on Euronext, the pan-European exchange.

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