The CEO of BlackRock helped pull the cryptocurrency industry out of its near-fatal post-FTX-collapse bear market and brought prices back to new highs.

Dec 10, 2024, 2:05 p.m. UTC

Larry Fink is nowhere close to being a first mover in cryptocurrencies. Yet, his firm, BlackRock, is making waves regardless and encouraging the rest of Wall Street to join the ride.

In 2023, BlackRock, the world's largest asset manager, shocked the investment and crypto community by filing for permission to create a bitcoin (BTC) exchange-traded fund. BTC's price soared following a giant of finance's surprising entrance into the crypto realm.

In 2024, BlackRock got permission from U.S. regulators, as did several other issuers. Many suspect BlackRock putting its considerable weight behind bitcoin ETFs may have helped sway the Securities and Exchange Commission.

This event was an early nominee for Crypto Story of the Year, and while Donald Trump's embrace of crypto on the campaign trail may have overshadowed this, the bitcoin ETF revolution remains high on the leaderboard.

The numbers show this.

Since the January approval, institutional investors have poured over $30 billion into the ETFs. This isn’t money coming from a tech-savvy crowd, or crypto “degens,” a term used to describe traders who take on high-risk, high-reward trading strategies. It’s capital that’s considered “smart money” given the extensive experience these hedge funds, endowments and other high-caliber firms have.

Here's another number: Crypto’s market cap has grown from roughly $1 trillion when BlackRock filed paperwork for its bitcoin ETF to now nearly $3.6 trillion, according to data from Coinmarketcap. We're now in an era when dogecoin (DOGE), the memecoin created as a joke that has absolutely no utility, has a larger market cap than Ford (F) and nearly twice that of Adidas (ADS) — both long-established, highly regarded brands that have been around for many years.

Fink's embrace of crypto surely helped pull the crypto industry out of its near-fatal post-FTX-collapse bear market.

Fink’s philosophy

Waiting for the right moment might just be Larry Fink’s secret sauce.

According to Fink, what sets a great company apart from good ones isn’t that they are the earliest adapter of a new trend, but rather their ability — and openness — to regenerate in an ever-changing world. BlackRock didn't invent ETFs. Someone else did in 1993. But Fink's company got huge in that space a decade and a half ago by acquiring iShares, which this year issued BlackRock's bitcoin ETF as well as one that tracks Ethereum's ether (ETH).

“There are many bad companies that have just a single product or a few products and don’t reengineer themselves; they don’t look at the ecosystem and see how it’s changing,”

Fink said in an interview with Harvard Business Review in 2015.

Looking back at BlackRock’s journey in the digital asset space proves that Fink practices what he preaches.

The popular narrative that Fink was long opposed to cryptocurrencies — specifically bitcoin — couldn’t be further from the truth. In a 2017 interview, the BlackRock CEO said he was a “big believer in the potential of what a cryptocurrency can do.” However, at the time, its use case didn’t go much beyond being a platform for speculation, he said.

Three years later, Fink, again, voiced his belief that the then nascent asset class could possibly "evolve" into a global market asset.

But it wasn’t until 2022 that BlackRock really began entering the space, letting certain clients trade crypto. Then came the bitcoin ETF application in 2023 and the product's debut this year. In the process, BlackRock helped transform the entire cryptocurrency industry.

“The optics of having one of the most powerful and influential figures in finance throw their support behind crypto ETFs was a clear game-changer,” said Nate Geraci, an ETF expert who has closely followed the journey of crypto ETFs.

For professional investors, BlackRock gave crypto a highly validating stamp of approval, opening the gates and allowing billions of dollars of institutional capital to flow into the industry.

Bitcoin, still hovering around the $44,000 mark at the beginning of this year, set a new record above $70,000 soon after the ETFs began trading in January. It set new highs above $100,000 in December after more than doubling since the launch of the ETFs.

The CoinDesk 20 Index, which tracks 20 of the largest crypto assets, was at one point up 53% weeks after the spot bitcoin ETFs launched in January, spurring hope that it would become a similar catalyst for other crypto assets.

“The BlackRock 'seal of approval' carries immense weight with investors, financial advisers and institutional players. Not only did Larry Fink offer this endorsement for spot bitcoin and ether ETFs, but he also publicly championed both underlying assets, enhancing their credibility,” Geraci said.

The institutions surely reacted.

Nearly 2,000 institutional holders have put money into the spot bitcoin ETFs, including top-tier hedge funds like Treasury Secretary contender Marc Rowan’s Apollo Global Management as well as Izzy Englander’s Elliott Management.

Even a pension fund, a university and a city, which are all typically known to make risk-averse investments, bought hundreds of millions worth of the ETFs.

BlackRock’s interest goes far beyond

BlackRock’s only interest in the digital asset space isn’t just to use it as a speculative asset. It goes far beyond that into the weeds of digitization of financial products or more specifically, real world asset (RWA) tokenization.

In March 2024, the asset manager announced a partnership with crypto-native firm Securitize to launch its first tokenized fund, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), which is issued on the Ethereum blockchain.

BUIDL wasn’t the first tokenized Treasury fund to hit the market. Franklin Templeton, for example, had launched its OnChain U.S. Government Money Fund (FOBXX) in 2021, years before BlackRock followed suit.

Again, Fink wasn’t the first mover, but it didn’t keep him from rushing to the top in no time. In less than six weeks after its inception, BUIDL became the largest tokenized Treasury fund at $375 million in market cap. The fund now stands at $530 million and continues to be at the top of the list, followed by Hashnote, Ondo and Franklin Templeton’s funds.

“This year, Securitize collaborated with BlackRock to launch their first tokenized fund, the BlackRock USD Institutional Digital Liquidity Fund, or BUIDL, which became the largest tokenized treasury fund in AUM in the world, helping to further bridge the gap between the TradFi and crypto markets,” said Carlos Domingo, co-founder and CEO of Securitize. “BlackRock has been publicly supportive of the potential of tokenization to transform capital markets, reinforcing our confidence in this technology, and we’ve been grateful for their commitment to evolving the ecosystem.”

The rapid growth in BlackRock’s product pushed the market cap of Tokenized Treasury notes past $2 billion in assets, making it an attractive vehicle for investors looking to take advantage of the rapid rise in Treasury yields over the past few years in an efficient marketplace.

The bottom line

The bottom line is this: Fink is not quick to venture out to new technologies. He’s an observer, who makes a move when the timing seems perfect.

Most figures in his TradFi circle probably know this, which is why Fink’s devotion to the crypto industry has had such a ripple effect on other heavyweights in the old-school financial crowd.

At the end of the day, it’s hard to believe that a pension fund would spend hundreds of millions of dollars on buying bitcoin if it wasn’t for Fink’s approval.

“This was essentially the 'Pope of Finance' blessing a new category for mainstream investors,” Geraci said. “The impact of that cannot be understated.”

This profile is part of CoinDesk's Most Influential 2024 package. For all of this year's nominees, click here.