There Are Many Bitcoin Critics Left in Finance, Despite BlackRock’s Newfound Love

Around
the
time
it
turned
15
and
following
years
of
scoffing
by
others
on
Wall
Street,
Bitcoin
in
2023
won
acceptance
from
one
of
the
most
powerful
investors
in
the
world,
BlackRock.
Other
traditional
finance
firms
had
endorsed
the
original
cryptocurrency,
to
be
sure,
but
BlackRock’s
blessing
–
in
the
form
of
filing
to
create
a

spot
bitcoin
ETF
and

vocal
praise
from
CEO
Larry
Fink
–
was
widely
viewed
as
a
surprising
and
significant
turn
of
events.

The
tone
around
bitcoin

(BTC)
seemed
to
shift
among
finance
professionals
–
at
least
some
of
them
–
in
the
aftermath,
with
more
players
voicing
support.

And,
yet,
earlier
this
month
at
an
event
in
Miami
for
investment
pros,
it
was
clear
that
a
significant
swath
of
the
industry
continues
to
have
serious
doubts
about
bitcoin.

“Bitcoin
is
just
an
extractive
bubble,”
Mike
Green,
portfolio
manager
at
Simplify
Asset
Management,
said
at
the
recent

Miami
Investment
Masters
Symposium.
“It’s
effectively
a
mechanism
to
transfer
wealth
from
one
group
of
individuals
to
another.”

That
skepticism
doesn’t
translate
into
Simplify
completely
ignoring
bitcoin,
however.
It
offers
customers
two
funds
that
are
exposed
to
BTC:
the
Simplify
Bitcoin
Strategy
PLUS
Income
ETF
and
the
Simplify
US
Equity
PLUS
GBTC
ETF,
which
invests
10%
of
its
assets
in
the
Grayscale
Bitcoin
Trust
(GBTC).

There
is
demand
for
bitcoin,
so
Simplify
is
meeting
that
desire,
Green
said.
But
this
doesn’t
change
his
overall
view
that
bitcoin
is
simply
a
mechanism
to
transfer
wealth.
“No
value
has
been
created
and
nothing
has
been
done
per
se.”

There
are
signs
of
broader
reluctance.
For
spot
bitcoin
ETFs,
even
though
they
have
seen
unprecedented
demand
for
a
newly
released
product,
they
are
not
being
offered
to
clients
of
some
wealth
management
firms,
including

Vanguard
and
State
Street.
Only
about
half
a
dozen
prominent
firms
have
disclosed
that
they
let
their
customers
invest
in
the
funds
and
experts
believe
that
most
of
the
volume
for
the
bitcoin
ETFs

comes
from
retail
investors.

Banking
giant
Goldman
Sachs,
though
it
plays
a
key
role
for
BlackRock’s
iShares
Bitcoin
Trust
(IBIT)
as
a
so-called
authorized
participant,
earlier
this
month
reiterated
that

it
doesn’t
believe
bitcoin
belongs
in
investment
portfolios
and
that
its
clients
are
not
interested
in
the
cryptocurrency.

Stone
X
Group’s
chief
strategist,
Kathryn
Vera,
gave
a
presentation
at
the
Miami
conference,
stating
that
bitcoin
won’t
be
a
reserve
currency
–
economics
jargon
for
a
currency
like
the
dollar,
euro
or
yuan
held
by
central
banks
to
support
global
trade
and
finance
–
“in
her
lifetime.”
A
key
reason
why
the
largest
conventional
currencies
are
cornerstones
of
finance
is
this
reserve
currency
status.

Gold
fan
and
economist
Peter
Schiff
called
bitcoin
gambling
money
that
has
no
use
in
the
present
or
the
future.
“This
whole
thing
is
a
big
bubble,”
he
said
at
the
event,
as
bitcoin
was
trading
around
a
new
record
high
above
$73,000.
“It’s
going
to
collapse.”

While
some
asset
managers
have
picked
their
side
and
stand
firm
on
their
opinions,
others
simply
aren’t
at
the
point
yet
where
they
are
forced
to
consider
the
asset
class
as
an
investment
–
despite
the
recent
creation
in
the
U.S.
of
11
bitcoin
ETFs
from
BlackRock,
Fidelity,
Grayscale
and
others
designed
to
make
it
easier
for
investors
to
buy
bitcoin.

Green
said
his
firm
isn’t
seeing
much
interest
in
bitcoin
from
its
clients
–
though
he
concedes
that
might
partly
be
the
firm’s
fault
as
it
doesn’t
actively
market
the
cryptocurrency
or
advise
clients
to
invest
in
it.

Another
asset
manager,
who
asked
not
to
be
named,
said
that
the
firm
is
making
its
clients
so
much
money
that
it
simply
doesn’t
need
bitcoin,
especially
because
the
crypto
asset
requires
a
level
of
forecasting
that
all
of
the
other
trades
that
the
firm
makes
don’t.
“Business
is
booming
with
the
focus
we
have,”
the
manager
said.

According
to
Green,
a
lot
of
his
peers
aren’t
willing
to
put
in
the
work
to
really
understand
the
technologies
behind
bitcoin
and
other
crypto
assets,
especially
when
there
is
no
pressure
from
clients
to
do
so
and
because
speaking
negatively
about
the
cryptocurrency
or
expressing
skepticism
or
speculation
in
the
space
doesn’t
seem
to
have
any
negative
impact,
he
said.

As
a
result,
there
is
a
tremendous
amount
of
disinformation
circulating
in
the
industry.

“There
is
a
lack
of
interest
in
really
understanding
it
because
it’s
really
hard
to
pursue
something
like
bitcoin
whole-cloth,”
he
said.