Bitcoin ETF blowout wows even BlackRock's Larry Fink
Blackrock CEO Larry Fink, who oversees $10 trillion, running the world’s largest asset manager, is no stranger to things being big. Still, the explosive growth of spot bitcoin exchange-traded funds, especially the firm’s, caught even the seasoned Wall Street executive off guard.
"I am very bullish on the long-term viability of bitcoin," he said Wednesday during an interview on "The Claman Countdown." The cryptocurrency has been climbing and hit a fresh all-time high of $71,000 this week.
"That surprised me how much that's gone up. I mean, look, we're creating now a market that has more liquidity, more transparency. And I'm pleasantly surprised. And I would never have predicted it before we filed it, that we were going to see this type of retail demand," Fink added.
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The firm’s iShares Bitcoin Trust ETF, which trades under the ticker IBIT, handily pulled in $10 billion in the first few weeks and is now nipping at the heels, with $17 billion in assets, of Grayscale’s Bitcoin Trust, which has $23 billion, as tracked by VettaFi through Thursday.
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"IBIT is the fastest-growing ETF in the history of ETFs. Nothing is gaining assets as fast as IBIT in the history of ETFs," Fink noted.
Investors are plowing money into spot bitcoin ETFs after the Securities and Exchange Commission approved these products for the first time in January, making it easier for both institutional and Main Street investors to invest in bitcoin.
It is also helping drive gains for the cryptocurrency, up 54% this year, ahead of the S&P 500’s 10% rise.
Interest in bitcoin is rivaling one of the safest assets on the planet: gold.
"In their first 30 days, the recently approved spot-based bitcoin ETFs attracted a whopping $30.6 billion. Just as staggering, it took only 57 days for these ETFs to cross $50 billion in AUM [assets under management] — a feat that took spot-based gold ETFs more than five years," noted Wells Fargo Institute’s John LaForge, head of Real Asset Strategy, and Mason Mendez, Investment Strategy Analyst, in a March 19 note.
While the demand is no doubt impressive, Sean OHara, President, PacerETFs Distributors, remains skeptical. Unlike a gold ETF, such as SPDR Gold Shares GLD, which is backed by physical gold, bitcoin is not backed by a physical asset.
"You can buy bitcoin, you know, lots of different places, and you can hold it in lots of different places. So to put it inside an ETF didn't make any sense to us because we wouldn't feel like we were delivering any real value," he said.