Fink's Flip: BlackRock Sees $59 Billion Worth of 'Digital Gold'

BlackRock CEO Larry Fink has made a significant pivot on his view of Bitcoin. In 2017, he called it 'an index of money laundering', but now he refers to it as 'digital gold'. This change in tone coincides with the growing popularity of Bitcoin funds, which have seen $3.3 billion in fresh money by the end of August.

The largest share of this influx has gone through BlackRock's iShares Bitcoin Trust (IBIT), which now holds about $59 billion. The company charges 0.25% a year and generates around $148 million in revenue from this fund alone.

In an attempt to justify the inclusion of Bitcoin in investment portfolios, BlackRock ran a hypothetical 10-year back-test on its strategy. According to their findings, adding a small slice of Bitcoin to a standard retirement portfolio could have earned more without taking on much more risk.

Vanguard, a rival index giant, still doesn't offer any direct Bitcoin product but has opened its platform to allow clients to trade third-party funds. Its Global Head of Quantitative Equity described Bitcoin as a 'digital Labubu', comparing it to the collectible toy craze that crashed in the Beanie Babies mold.