Larry Fink, the CEO of Blackrock overseeing a massive $10 trillion in assets, has been taken aback by the explosive growth of spot bitcoin exchange-traded funds (ETFs), particularly those offered by his own firm. In an interview on “The Claman Countdown,” Fink expressed his bullish outlook on the long-term viability of bitcoin, noting its recent climb to a fresh all-time high of $71,000.
Fink admitted his surprise at the significant surge in bitcoin’s value, emphasizing the emergence of a market with increased liquidity and transparency. He expressed his pleasant surprise at the robust retail demand for bitcoin, a trend he had not anticipated before Blackrock filed for its bitcoin ETF.
Blackrock’s iShares Bitcoin Trust ETF, trading under the ticker IBIT, experienced remarkable success, attracting $10 billion in assets within the first few weeks. As of the interview, IBIT had amassed $17 billion in assets, closely trailing Grayscale’s Bitcoin Trust, which held $23 billion in assets, according to data from VettaFi through Thursday. Fink highlighted IBIT’s rapid asset growth, labeling it as the fastest-growing ETF in history.
The approval of spot bitcoin ETFs by the Securities and Exchange Commission in January facilitated easier access for institutional and retail investors to invest in bitcoin, fueling the surge in investments. This increased interest has contributed to bitcoin’s gains, which have outpaced the S&P 500 with a 54% rise year-to-date.
The popularity of bitcoin ETFs has rivaled traditional safe-haven assets like gold. Wells Fargo Institute’s John LaForge and Mason Mendez noted that the recently approved spot-based bitcoin ETFs attracted a staggering $30.6 billion in their first 30 days. Furthermore, it took only 57 days for these ETFs to surpass $50 billion in assets under management, a milestone that took spot-based gold ETFs over five years to achieve.
Sean OHara, President of PacerETFs Distributors, maintains a skeptical stance on the demand for bitcoin ETFs, citing fundamental differences between bitcoin and traditional assets like gold. While gold ETFs like SPDR Gold Shares (GLD) are backed by physical gold, bitcoin lacks physical backing.
OHara pointed out that bitcoin can be purchased and held in various ways across different platforms, questioning the necessity of placing it inside an ETF. He expressed doubts regarding the perceived value delivered by a bitcoin ETF, emphasizing the absence of tangible backing compared to assets like physical gold.