BlackRock CEO Larry Fink Discusses Bitcoin ETFs and the Future of Asset Management

Just one day after the January approval of Bitcoin spot ETFs, including BlackRock’s iShares Bitcoin Trust (IBIT), by the U.S. Securities and Exchange Commission, BlackRock Chair and CEO Larry Fink sat down with Bloomberg’s David Westin to discuss the implications of the world’s largest asset manager entering the Bitcoin market. Not one to mince words, Fink articulated a clear framework for his company’s approach to Bitcoin and furthermore, for BlackRock’s intention to replicate similar ETF products for other assets.

“If we can ‘ETF’ a Bitcoin, imagine what we can do with all financial instruments,” Fink continued, speaking about Bitcoin itself, stating, “I don’t believe it’s ever going to be a currency. I believe it’s an asset class.”

While the BlackRock Chair was not shy about expressing other aspects of the potential build of tokenized digital markets, these two statements, in particular, illuminate the coveted path forward for how the biggest institutions intend to carefully integrate Bitcoin into the legacy financial system. Fink even went so far as to turn the abbreviated noun “ETF” (exchange-traded fund) into a verb, gloating about transmuting the Bitcoin protocol into just another speculative commodity, with all the efforts of miners and nodes across the world to decentralize trust in issuance and settlement reduced to a paper offering by their iShares division.

The biggest players in the United States dollar system are all but clamoring over each other to offer such products to their retail customers, understanding that this axiom neuters Bitcoin as a viable currency capable of competing with the day-to-day bargaining and settlement utility of the dollar. There are many reasons to believe the US dollar system has much to gain from a dollar-denominated appreciation of Bitcoin, but significantly less so if the protocol itself is capable of serving the everyday transactional needs of billions across the globe.

One of the most common rebuttals to the claim that Bitcoin cannot scale to become a functioning currency is the Lightning Network. While the trustless method of shared unspent transaction outputs (UTXOs) via hashed time-locked contracts (HTLCs) payment channels is quite novel, the ultimate endgame for such a model servicing billions necessitates a large amount of liquidity in Bitcoin terms locked up within the network. A centralized Lightning Network brings about many issues of privacy, transactional censorship, and even user access restrictions, not to mention the mathematical realities of demand for Bitcoin’s limited block space when opening a billion channels.

Many FinTech companies, such as Lightning Labs and Blockstream, have spent millions in capital developing methods for utilizing Bitcoin as a way to issue tokenized assets, such as stablecoins like Tether’s USDT, in order to transact dollar-denominated tokens via Lightning channels or federated sidechains. While the institutional adoption dreamed of by early Bitcoin adopters has certainly come to fruition, the actualization and methods of these institutions are clear: Bitcoin must remain an asset, and all effort on scaling it as a currency should be directed towards the dollar.

Fink himself, in the same Bloomberg interview, stated, “We believe ETFs are a technology, no different than Bitcoin was a technology for asset storage.” Bitcoin spot ETF products encourage many practices far outside the norm of the typical Bitcoin user within the near decade and a half of its existence, such as trusting a custodian with your keys, limiting exchange to US business days and hours, and aggregating individual exposure into a collective paper claim managed and surveilled by highly-regulated brokers.

The anti-State revolution that has dominated most Bitcoin discourse since has become colored by red, white, and blue ticker tape. Furthering the idea that the US has much to gain from the adoption and co-option of Bitcoin is the tangible stash of coins distributed within its borders. MicroStrategy’s Bitcoin, the Bitcoin seized by the Department of Justice,’s, Grayscale’s in GBTC, and now the new US spot ETF offerings hold a combined Bitcoin as of [date]. This is inarguably a meaningful portion of the circulating supply of Bitcoin.