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BlackRock CEO counters reports of firm’s involvement in bitcoin

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Andrew Munro
Posted: 17 July 2018 12:12 pm
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Bitcoin Strong - FI
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CEO Larry Fink has clarified that BlackRock is only interested in cryptocurrency from a safe distance.

News recently broke that BlackRock, the world's largest investment manager with $6.3 trillion of assets under management, had set up a working group to investigate bitcoin, and the potential of investing in bitcoin futures.

BlackRock CEO Larry Fink has since walked the statement back down, clarifying that the firm is more interested in blockchain technology, and that its interest in bitcoin and cryptocurrencies is so far restricted to examining how they perform, and how the technology works.

"We are very excited about blockchain technology... we're looking at blockchain technologies and we're looking at cryptocurrencies," he clarified. "But right now I can tell you that worldwide, I have not heard from one client who said 'I need to be in this'."

"I don't believe any client has sought out crypto exposure."

When asked whether he felt that BlackRock needed to be prepared for future interest, in line with Goldman Sachs and Morgan Stanley moving into cryptocurency in response to client interest, Fink's reponse was simply "not the moment, no."

"There is elements of people who are looking to trade it. I have not heard from any one client who's looking to buy cryptocurrency at this time."

He didn't rule out the possibility of being involved in the future though, and named the need for openness and transparency as one of the hurdles to be overcome first. When it is, he said, cryptocurrencies might be explored as a potential alternative to all currencies.

"When it becomes more legitimised, the true open nature of it, that you identify who the players are on both sides, that's when we'll probably look at it as an alternative to all currencies."

Right now, he said, BlackRock's interest in cryptocurrencies is from a distance, and is just limited to observations which can be tied to other products, and blockchain technology itself.

"We're studying it, we're looking at how they perform, we're looking at that type of data to understand it, as we think about other products."

The news that BlackRock was exploring cryptocurrency saw Fink, who previously described bitcoin as a money laundering index, being compared with JP Morgan CEO Jamie Dimon, who once described bitcoin in similar terms, but eventually steered JP Morgan towards closer involvement in bitcoin and other cryptocurrencies.

It seems statistically extremely unusual that BlackRock, the world's largest investment management firm, seemingly doesn't have a single client requesting cryptocurrency exposure. Because by the numbers people are very interested, many other smaller and very traditional institutions report strong client demand for crypto and there are compelling statistical cases for a small allocation even with prices being down.

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, NANO

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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