Blackrock CEO Larry Fink Still Skeptical On Crypto, Bitcoin ETF
While discussion regarding Bitcoin-backed exchange-traded funds (ETFs) have begun to slow, the chief executive of BlackRock, a multinational America-based financial institution, recently claimed that he is hesitant to allow his firm to offer a Bitcoin ETF due to the current state of cryptocurrency markets.
BlackRock, the world's largest asset manager, is avoiding a bitcoin ETF until cryptocurrencies become “legitimate.” https://t.co/DFpaSHo0ag
— CNBC (@CNBC) November 1, 2018
Speaking with CNBC at Manhattan’s New York Times Dealbook Conference on the matter, Larry Fink, the aforementioned CEO at Blackrock, which manages upwards of $ 6.3 trillion in assets, noted that while he isn’t fully against the long-term success of crypto assets, the launch of a crypto-backed ETF is far from around the corner.
Interestingly, in direct contradiction to Bitcoin’s ‘raison d’être’ — which is to undermine centralized financial institutions via a peer-to-peer system — Fink claimed that the decentralized nature of a majority of crypto assets could directly hamper the development of this nascent industry.
Citing fears of tax evasion and some of Bitcoin’s other “issues,” Fink added that “ultimately,” ETFs will need to be “backed by a government.” The prominent institutional player elaborated, stating:
I don’t sense that any government will allow that unless they have a sense of where that money’s going for tax evasion and all of these other issues.
Not only is Bitcoin’s decentralization an issue to Fink, but so is the pseudonymous and almost non-traceable nature of BTC transactions. Over the asset’s now-10-year history, BTC has been used to purchase guns, drugs, and other black market-centric/contraband goods.
However, many see this specific argument as invalid, as many of crypto’s critics fail to remember that U.S. dollars and nearly every other government-issued currency are actively used in illicit transactions on a day-to-day basis.
Expressing further pessimism, the now-65-year-old who worked at First Boston during his youth, noted:
I do see one day where we could have electronic trading for a currency that could be a store of wealth. But right now the world doesn’t need a store of wealth unless you need that store of wealth for things you should not be doing.
However, interestingly, Fink still expressed his optimism for blockchain technologies, despite his apparent distrust towards cryptocurrencies.
Speaking on behalf of BlackRock, which has been rumored to have launched a working group centered around blockchain technology, the institutional investor noted that BlackRock is a “huge believer in blockchain,” adding that he could see the innovation being used in everything from “mortgages, mortgage applications, and mortgage ownership” to anything that’s “labored with paper.”
Fink’s views on blockchain aside, the bottom line is that BlackRock isn’t poised to back/launch nor trade a Bitcoin-centric ETF any time soon, even in spite of rumors that the New York-based institution briefly spoke with San Francisco-based Coinbase on the matter.
Bitcoin ETF Hopefuls Speak With Regulators — Shifting Regulatory Climate?
Although Fink seems against crypto-backed investment vehicles, as reported by Ethereum World News previously, the U.S. Securities and Exchange Commission (SEC) recently revealed that a paramount closed-door meeting occurred regarding the future of Bitcoin ETFs. According to a memorandum of the event, which occurred on October 9th, Commissioner Roisman, who has been classified as “pro-crypto” by some, four legal counsels, and five representatives from VanEck, CBOE, and SolidX Partners were all in attendance.
In the 11-part slide deck, New York-based VanEck, which has been working on a Bitcoin ETF with SolidX Partners since 2017, has claimed that the SEC’s issues of yesteryear, which were outlined in historical ETFdisapproval orders, “have been resolved.”
More specifically, in a slide titled “VanEck SolidX Bitcoin Trust Should Be Approved,” ETF advocates noted that monumental progress has been made towards solving regulatory qualms. Most notably, VanEck claimed that there now “exists a significant regulated derivatives market for Bitcoin,” adding that CBOE’s rules dictate that market surveillance will be a priority in the proposed fund.
No comments from the SEC were issued on VanEck’s slide deck, but many investors are hopeful that the attendees of the forum were pleased with what was presented.
Title Image Courtesy of Marcus Cramer on Unsplash
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