BlackRock's Larry Fink Eyes Bitcoin Allocation With Sovereign Wealth Funds
BlackRock CEO Larry Fink has been discussing potential Bitcoin allocations with sovereign wealth funds. This comes as Bitcoin spot ETFs in the US have seen over $36 billion in net inflows in their first year. Fink, who initially was a skeptic, has now become a prominent advocate for Bitcoin.
Fink has spoken favorably about Bitcoin at the World Economic Forum in Davos and views it as 'digital gold' and an asset 'bigger than any government'. He has advised clients to include Bitcoin in a conservative stocks-bonds portfolio with a weighting of 1 to 2 percent. In a recent discussion with a sovereign wealth fund, Fink suggested an appropriate Bitcoin weighting of 2 to 5 percent, which could potentially drive the Bitcoin price to $500,000 to $700,000.
Bitcoin's market capitalization at a price of $700,000 would exceed $14 trillion, surpassing the current value of all gold units combined. Fink sees Bitcoin as a kind of crisis insurance for those worried about currency devaluation or economic instability. Sovereign wealth funds managed around $11.5 trillion in February 2023, and a 5 percent allocation to Bitcoin would result in a purchase demand of over $500 billion. BlackRock's Bitcoin ETF, IBIT, already manages over 570,000 BTC, worth around $60 billion, with a management fee of 0.21%.
The potential impact of sovereign wealth funds allocating a significant portion of their assets to Bitcoin could be substantial, driving up demand and Bitcoin price. Fink's advocacy for Bitcoin reflects a growing acceptance of the asset by major financial institutions. However, the specific sovereign wealth fund Fink discussed the potential adjusted Bitcoin allocation with remains unknown.
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