News - This is how serious BlackRock, Fidelity Investments and Co. are about Bitcoin

By Ted Maas

This is how serious BlackRock, Fidelity Investments and Co. are about Bitcoin

Bitcoin (BTC)
World Economy

Market observers and experts are divided on the question surrounding Bitcoin ETF applications from BlackRock, Fidelity and Invesco. Do these companies want to make money fast or do they actually have long-term commitment? Let’s take a closer look at the situation.

We have already reported extensively on the bitcoin ETF proposals from Wall Street giants such as BlackRock, Fidelity Investments and Invesco. One contentious issue is the extent to which these asset managers are serious about the digital asset class.

Bitcoin ETFs: Making money fast?

For internationally known gold fan and Bitcoin critic Peter Schiff, the matter is clear. In an interview with BTC-ECHO, he compares BlackRock and Co. to casino operators who deliberately take money out of their customers’ pockets and act purely opportunistically:

"First they generate publicity, and once prices have risen, they sell again and possibly use a small portion of these profits to cover some of the costs of making these products. It looks like a pump-and-dump scheme."

Schiff, who has often been critical of Bitcoin, sees bitcoin spot ETFs as a Trojan horse and shell game that has nothing at all to do with beliefs. On the contrary, they rather manifest Wall Street’s anti-attitude toward Bitcoin and other cryptocurrencies.

BlackRock CEO Larry Fink with clear words

But that is Peter Schiff’s opinion. Let’s examine the words of BlackRock CEO Larry Fink. In an interview with the news channel Fox Business, he expressed his clear conviction for Bitcoin: "Crypto is digital gold and Bitcoin is an international asset ... it can be an asset that people can use as an alternative," continued Fink.

Of course, one could argue that this statement is just part of the selling strategy, provided BlackRock gets permission to issue a bitcoin spot ETF. On the other hand, Larry Fink has a reputation to lose. A reputation he is putting on the line with this. Certainly not a trivial matter for the billionaire. If Fink thought nothing of Bitcoin at all, it would be incredible for him to stoop to such a public statement.

Administrator only, not always decision maker

Even if BlackRock and its advisers can influence its clients’ investment strategy, it is the buyers themselves who make buying and selling decisions. After all, an ETF is merely an offering made to potential clients. Unlike a hedge fund with active management, an ETF provider’s hands are tied.

A pump-and-dump scheme, as Peter Schiff predicts, is therefore quite difficult for ETF asset managers to implement. It is therefore unlikely that BlackRock, like its bitcoin spot ETF competitors Fidelity Investments and Invesco, has a direct interest in sending bitcoin down.

Opinions about Bitcoin may change

So Schiff’s comments are mostly very negative because the image damage to asset managers in the event of a Bitcoin collapse, as Peter Schiff predicts, would be very great. And as is well known, the opinions of Wall Street employees vary widely. In short: Some employees of the investment giants think Bitcoin is good, others in the century-old system think it is bad. Therefore, there is no single opinion and investment strategy on Bitcoin and other cryptocurrencies, although the thrust seems unstoppable in the long run.

Especially as more and more bankers in traditional finance are changing their minds about the digital asset class as time goes on. This is best illustrated by the BlackRock boss himself. As recently as 2017, he had criticized Bitcoin as a "money laundering index". The new question to Larry Fink about whether Wall Street is now serious about Bitcoin he answers with: "yes, by now". Times are changing.

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