BlackRock's Larry Fink embraces crypto, as asset manager's bitcoin ETF is now worth nearly $20 billion

By Joseph Adinolfi

BlackRock's iShares Bitcoin Trust IBIT launched earlier this year. It is now the largest among its peers.

'I believe bitcoin is legitimate. I'm not saying there aren't minuses like everything else, but it is a legitimate financial instrument that allows you to have uncorrelated returns.' BlackRock CEO Larry Fink

That was BlackRock Inc. co-founder and CEO Larry Fink saying his initial skepticism of cryptocurrencies like bitcoin has been assuaged, in an interview with CNBC on Monday.

While acknowledging earlier doubts and criticisms, Fink said he became a believer in cryptocurrencies after dedicating time to studying and learning about bitcoin. He now sees a place for crypto in the average investor's portfolio.

When asked by CNBC host Jim Cramer if the U.S. budget deficit strengthened the case for investing in crypto, Fink replied, "Absolutely." He added that crypto can help buyers hedge against countries that are debasing their currencies.

Of note, BlackRock's iShares group launched the iShares Bitcoin Trust IBIT earlier this year. The fund has $18 billion in assets, according to FactSet data, making it the largest bitcoin exchange-traded fund. Shares of the fund were up 9.5% to $35.99 a share on Monday as bitcoin rallied following the attempted assassination of former President Donald Trump.

Fink touched on a number of themes during the interview, which was held after BlackRock (BLK) reported its second-quarter financial results earlier on Monday. Fink talked about the threat of rising budget deficits in the U.S., the dangers of political polarization, the need for elected officials to give priority to economic growth through the private sector, as well as BlackRock's attempts at "democratizing" access to private markets, including by creating new products for individual investors.

On that front, Fink said BlackRock intended to offer everyday investors access to infrastructure funds following its deal to purchase Global Infrastructure Partners earlier this year.

According to Fink, these funds could offer double-digit returns that may be "perfect for any retiree," Fink said. "We're going to find ways to democratize markets like infrastructure so they can get in," he added.

Fink also talked about the firm's plans following its recent deal to acquire Preqin, a provider of data on private markets. Ultimately, Fink said he envisions offering investors access to private companies and markets via ETFs.

Recently, a closed-end fund offering investors exposure to stakes in hot private companies like SpaceX and OpenAI saw its shares briefly soar by more than 1,000% after its launch. Shares of Destiny Tech100 Inc. DXYZ, as the fund is known, have since pared back almost all of that advance, according to FactSet data.

BlackRock posted earnings and revenue growth that beat analysts' estimates for the second quarter, along with record inflows into the asset-manager's ETFs, which helped swell its assets under management to more than $10.6 trillion. The company's shares, which were fluctuating between gains and losses in early trading on Monday, were last up 0.9%.

-Joseph Adinolfi

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07-15-24 1632ET

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