BlackRock clients worldwide talk about the ‘need for crypto,’ Larry Fink says

Happy Tuesday!

Bitcoin’s price spiked Tuesday following a false report stating that BlackRock’s application for a spot exchange-traded fund had been approved. The multi-trillion dollar asset manager’s CEO Larry Fink spoke to Fox Business about the price moves and why investors like crypto.

Let’s get into it!

Swings and roundabouts

Crypto prices soared early on Monday as Bitcoin briefly traded around $30,000. The price move followed a false report on social media that BlackRock’s spot Bitcoin ETF had been approved.

Bitcoin coughed up most of its gains once the asset manager denied the claim, the price remains above $28,400. The lack of liquidity in the market at present explains the spike, crypto research firm Kaiko’s Riyad Carey told DL News.

It took very little to move the price, and once it did move higher “it was thin air up there,” Carey said.

The price action led to just under $190 million in liquidations on Monday, according to Coinglass data. This occurs when traders betting on futures or on margin are forced to close positions due to being in the red. Traders going short suffered over $136 million, while those with long positions lost about $52 million.

Most of the losses followed the price spike as Bitcoin shorts lost over $84 million.

BlackRock’s CEO Larry Fink went on Fox Business to discuss the price moves and crypto more generally on Monday evening in New York.

There is a pent-up interest in digital assets, Fink said, adding that, “we’re hearing from clients around the world about the need for crypto.”

Monday’s rally was “way beyond the rumour,” Fink said, and likened recent price moves to a “flight to quality,” due to the conflict in Israel and Palestine.

Crypto, like gold or US Treasuries, will act as a safe investment during times of uncertainty, Fink argued.

Fink’s comments echo similar remarks made by Ark Invest CEO Cathie Wood, who wrote about Bitcoin’s safe haven qualities following the collapse of several US regional banks in March.

Wood reiterated this stance when she spoke with podcaster Natalie Brunell recently. The fund manager also shared insights on the US Securities and Exchange Commission’s approach to Bitcoin.

Staff at the agency understand Bitcoin’s “merits,” Wood said, but chairperson Gary Gensler stands in the way of approval.

Bitcoin ETF enthusiasts have faced a litany of denials over the past decade since the Winklevoss twins, of Facebook and Gemini-fame, first applied for a spot ETF in 2013.

ETFs offer investors an affordable and convenient way to gain exposure to the performance of stocks, commodities, and more recently digital assets.

It would also give investors the opportunity to buy Bitcoin through a regulated and trusted structured product.

Spot ETFs track the current price of the underlying asset and would require issuers to hold Bitcoin.

Futures ETFs have already been launched in the US, for Bitcoin and Ethereum. These track the price at a future date.

Crypto market movers

• Bitcoin is up 2.4% to around $28,430 over the past 24 hours.
• Ethereum was flat since Monday, as it continued to trade below $1,600.
• Solana’s SOL added 4.3% to trade above $24.

What we’re reading

• EU watchdog tells crypto regulators to get their act together ahead of MiCA and stop ‘letter-box’ firms — DL News
• FTX executive details SBF’s ‘embarrassing’ spending — who is Nishad Singh? — DL News
• How Hamas and SBF thwart crypto bills in the US — DL News

Adam Morgan McCarthy is DL News’ London-based Markets Correspondent. Got a tip? Reach out at adam@dlnews.com. Tom Carreras is a Markets Correspondent at DL News. Got a tip? Reach out at tcarreras@dlnews.com