BlackRock’s Larry Fink Calls Bitcoin ETF ‘Stepping Stone’ Toward Tokenization
Bitcoin made its Wall Street debut, but BlackRock’s CEO isn’t satisfied yet
By: André Beganski
January 16, 2024
GM! This week, Vanguard bars investors from spot Bitcoin ETFs as BlackRock CEO Larry Fink touts tokenization tech, lawmakers react to Bitcoin’s Wall Street debut, Circle seeks an IPO, Fox and Polygon roll out a blockchain-based solution, and Do Kwon’s upcoming trial faces a likely delay over his extradition.
From Wall Street to Capitol Hill
Spot Bitcoin ETFs gained regulatory approval from the Securities and Exchange Commission last week, but not every company and politician was on board. The titanic money manager Vanguard said last Thursday that it will not offer investors spot Bitcoin ETFs because of its “long-standing [perspective] that cryptocurrencies' high volatility runs counter to [its] goal of helping investors generate positive real returns over the long term.”
The firm’s criticism of crypto echoed comments from Massachusetts Senator Elizabeth Warren, who said the same day that the SEC’s approval of spot Bitcoin ETFs was “wrong on the law.” The lawmaker urged the SEC not to let crypto “burrow even deeper” into the American financial system. Still, she was hit with a community note — it pointed out that U.S. courts deemed the approval of spot Bitcoin ETFs lawful last year.
Meanwhile, BlackRock CEO Larry Fink said there is value in offering a spot Ethereum ETF (BlackRock filed for one last November). Regarding spot Bitcoin and Ethereum ETFs, his stance is that both products are key ‘stepping stones’ toward tokenization, a concept where existing assets would be brought on-chain for trading.
On Capitol Hill, a handful of lawmakers aren’t too happy with the SEC after the agency’s compromised X account falsely said spot Bitcoin ETFs were approved last week, causing $90 million in liquidations, per CoinDesk. Describing it as a “disturbing” and “unacceptable” failure, House Financial Services Chairman Patrick McHenry demanded a briefing on the incident in a letter signed by three other members of Congress.
Crypto Inflows Spike
Digital asset investment products saw $1.18 billion worth of inflows last week as spot Bitcoin ETFs debuted, according to data from CoinShares’ Head of Research James Butterfill. Capturing only a couple of trading days for spot Bitcoin ETFs in the U.S., the inflows represented almost half of the $2.25 billion of inflows recorded last year. (Yes, half.)
Aside from $1.1 billion of inflows toward Bitcoin-based products, investors allocated $26 million to Ethereum last week. While digital asset trading products tracked by CoinShares saw record-setting volume, the net inflows from the launch of spot Bitcoin ETFs trailed the $1.5 billion worth of inflows following the launch of futures-based Bitcoin ETFs in 2021.
Circle’s Wall Street Gambit
Circle, the issuer of crypto’s second-largest stablecoin by market capitalization, USDC, has filed confidentially with the SEC for an IPO. As far as crypto-natives go, Circle would join Coinbase as one of the few publicly traded companies in the U.S. if all is approved.
While USDC boasts a market capitalization of $26 billion, the product’s footprint is still quite small compared to Tether’s $95 billion market cap. Circle attempted to go public via SPAC in 2021, but the move ultimately fell through.
Fox and Polygon Team Up
With presidential primaries in full swing for this year’s upcoming election, Fox Corporation and Polygon rolled out a new platform to stem the potential dangers of AI. Dubbed Verify, the platform announced by Polygon and Fox allows media companies to register content, so its source can be verified using blockchain technology.
AI-generated content has already been tapped by bad actors in the Web3 space, but Polygon and Fox hope the tool can be used more broadly. In a post on X, Polygon said that over 89,000 pieces of content — from audio to images — have been verified using the platform. Another feature the platform offers is for media organizations to grant usage rights to AI platforms. Perhaps the platform can demonstrate use cases for crypto with broad, non-financial appeal.
Do Kwon Moves to Delay Trial
Do Kwon asked a Manhattan judge to delay his civil trial to mid-March, so the Terraform Labs co-founder could attend. Hit with charges by the SEC last year, Kwon is slated to stand trial for securities fraud at the regulator’s behest later this month.
Kwon is still in custody in Montenegro, where he recently filed an appeal against a decision upholding his extradition to either South Korea or the U.S., per CoinDesk. On Monday, the SEC signaled it was okay with a delay to ensure that Kwon is present when he stands trial.
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