"Bitcoin is a Fear Asset"! BlackRock CEO Softens Stance as IBIT Surges to $70 Billion

Asset management giant BlackRock’s Chairman and CEO Larry Fink has softened his stance on Bitcoin. He has described Bitcoin as a “fear asset,” noting that its price dropped following news about a potential end to the US-China trade agreement and the war in Ukraine. The BlackRock iShares Bitcoin Trust ETF (IBIT) once reached a market cap of $70 billion, but experienced over $2.3 billion in net outflows in November.

Fink’s 8-Year Reversal: From Money Laundering Criticism to $70 Billion ETF

On December 3, Fink spoke at The New York Times DealBook Summit, responding to journalist Andrew Ross Sorkin’s questions regarding his views on cryptocurrency and Bitcoin. The BlackRock CEO stated that his journey from associating cryptocurrency primarily with money laundering to now holding billions of dollars’ worth of Bitcoin is “a very clear public example of a major change in my perspective.”

Fink’s remarks are in stark contrast to those he made in October 2017, when Bitcoin had yet to experience its famous bull run and had not reached historical price highs. At that time, he said cryptocurrency “shows you how much demand for money laundering there is in the world.” This tough criticism sparked widespread discussion, as BlackRock, being the world’s largest asset management company, has opinions that often set the tone for the entire financial industry.

In the eight years since that statement, BlackRock’s position has undergone a 180-degree shift. BlackRock received regulatory approval from the US Securities and Exchange Commission and launched one of the first spot Bitcoin ETFs in January 2024. The iShares Bitcoin Trust ETF (ticker: IBIT) reached a peak market cap of about $70 billion, making it the largest Bitcoin ETF in the US market.

This change in stance is not an isolated event but reflects the evolving perception of Bitcoin across the traditional finance industry. In 2017, most Wall Street institutions viewed Bitcoin as a speculative bubble and a tool for crime. But as regulatory frameworks have improved, custody solutions have matured, and institutional-grade products such as ETFs have been launched, Bitcoin has moved from a fringe asset to a mainstream investment portfolio component. Fink’s change in attitude in some ways represents Wall Street’s collective awakening.

Three Major Milestones in BlackRock’s Entry into the Bitcoin Market

January 2024: SEC approves the first batch of spot Bitcoin ETFs, IBIT successfully launches

Mid-2024: IBIT’s assets under management surpass $50 billion, becoming the fastest-growing ETF in history

2024 Peak: IBIT’s market cap reaches $70 billion, establishing its market leadership

At the summit, Fink admitted: “My way of thinking is always evolving.” Such a public admission of past mistakes is extremely rare among Wall Street executives. Most financial leaders would rather stay silent than admit a change in stance. Fink’s candor has instead enhanced BlackRock’s credibility, showing that company decisions are based on rational analysis rather than ideology.

The Deeper Meaning of Bitcoin as a “Fear Asset”

Sharing the stage with Coinbase CEO Brian Armstrong, Fink did not fully endorse Bitcoin during the discussion. Fink described Bitcoin as a “fear asset,” pointing out that after news of a potential end to the US-China trade agreement and the war in Ukraine, the price of this cryptocurrency fell. This definition offers a new perspective for understanding Bitcoin’s role in the global financial system.

The term “fear asset” is worth deeper exploration. Traditionally, gold is considered the typical fear or safe-haven asset—when geopolitical risks rise or financial markets are volatile, investors flock to gold for safety. By classifying Bitcoin as a fear asset, Fink suggests Bitcoin has acquired a similar safe-haven function as gold. This is a significant affirmation of Bitcoin’s status, as it is no longer seen purely as a speculative tool but as an asset class with defensive value.

However, Fink’s observation also reveals a paradox about Bitcoin as a fear asset. When positive news broke about a potential end to the US-China trade agreement and the Ukraine war, Bitcoin’s price did fall. This price behavior is consistent with traditional safe-haven assets: when risk subsides, capital flows out of safe-haven assets and into risk assets like stocks. This reaction pattern proves that Bitcoin is playing a hedging role in macro asset allocation.

Fink also reminded investors, “If you’re buying Bitcoin for trading, it’s an extremely volatile asset. You have to be very good at timing the market, and most people don’t have that ability.” This warning shows that even though BlackRock has launched a Bitcoin ETF, Fink personally remains cautious about Bitcoin. He acknowledges Bitcoin’s value but also stresses its high-risk nature—this balanced view reflects the rational attitude of a seasoned investor.

IBIT Sees $2.3 Billion Outflow in a Month but Long-Term Confidence Remains Unchanged

According to Cointelegraph, IBIT experienced over $2.3 billion in net outflows in November, including about $463 million in redemptions on November 14 and about $523 million on November 18. These large outflows occurred as Bitcoin’s price pulled back from historical highs, reflecting some investors’ decisions to take profits or reduce risk exposure.

A $2.3 billion monthly net outflow is significant in absolute terms, but must be evaluated in the context of IBIT’s overall size. Even after these outflows, IBIT’s assets under management remain in the tens of billions of dollars, far exceeding its competitors. The largest single-day redemption of $523 million occurred on November 18, a day when Bitcoin’s price experienced significant volatility, prompting some large institutions to adjust their positions.

However, BlackRock’s Head of Business Development, Cristiano Castro, stated at the time that the asset manager remains confident in ETFs as “highly liquid and powerful tools.” This demonstrates that BlackRock views short-term outflows as normal market fluctuations, not a loss of confidence in the product itself. The core advantage of ETFs is precisely to provide liquidity, allowing investors to enter and exit flexibly based on market conditions.

Over a longer time frame, IBIT has seen cumulative net inflows of tens of billions of dollars since its launch. November’s outflows are merely a phase of adjustment and have not altered institutions’ long-term allocation trends toward Bitcoin. In fact, many analysts believe such outflows offer new capital more favorable entry opportunities. Outflows at high prices and inflows at lower prices are typical moves for professional investors.

IBIT November Outflow Analysis

Total outflow: Over $2.3 billion

Largest single-day redemption: About $523 million on November 18

November 14 redemption: About $463 million

BlackRock’s response: Full confidence in ETFs as liquidity tools

Other major spot Bitcoin ETFs in the market include products from Grayscale, Bitwise, Fidelity, ARK 21Shares, Invesco Galaxy, and VanEck. The presence of these competitors gives investors diversified choices, but IBIT, leveraging BlackRock’s brand advantage and distribution network, remains the market leader.

Industry-Wide Transformation Behind Fink’s Softer Stance

Fink’s remarks at the summit reveal a fundamental shift in Wall Street’s perception of Bitcoin. The change in definition from “money laundering tool” to “fear asset” reflects Bitcoin’s evolving role in the global financial system. In 2017, Bitcoin mainly circulated on the dark web and gray markets, with a lack of regulation and highly speculative prices. By 2025, Bitcoin now enjoys a clear regulatory framework, institutional-grade custody solutions, and mainstream investment products.

The timing of Fink’s softened stance is also noteworthy. After BlackRock launched IBIT and quickly became a market leader, this commercial success has undoubtedly reinforced the company’s positive view of Bitcoin. However, Fink remains cautious, emphasizing volatility risk, showing that BlackRock is not blindly bullish but offers products based on a risk management framework. This balanced approach may be key to BlackRock gaining SEC approval and attracting conservative institutional investors.