12/04 update below. This post was originally published on December 03
Bitcoin and crypto prices have bounced back this week as the market braces for a massive Federal Reserve December flip.
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The bitcoin price has charted its best day since May as it adds 10% to top $93,000, up from lows of under $84,000 earlier this week and putting it back within touching distance of a $2 trillion market capitalization, with traders betting on a 2026 game-changer.
Now, as an “important” bitcoin price signal suddenly starts flashing, the chief executive of the world’s largest asset manager BlackRock has predicted the “enormous growth” of crypto-based tokenization in coming years.
12/04 update: BlackRock chief executive Larry Fink has revealed unnamed sovereign funds are buying bitcoin amid the recent price dips.
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U.S. president Donald Trump met BlackRock chief executive Larry Fink during Trump’s first term in the White House—before either of the pair began supporting bitcoin and pushing up the bitcoin price.
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“There are a number of sovereign funds that are standing by,” Fink said, adding they’re buying “incrementally” as the bitcoin price has fallen from its $126,000 peak.
“I know they bought more in the 80s. And they’re establishing a longer position. And you own it over years. This is not a trade. You own it for a purpose, but the market is skewed, it is heavily leveraged and that’s why you’re going to have more volatility,” Fink said, referring to two major bitcoin price swings since October that have sent the bitcoin price sharply lower.
In recent months, sovereign funds in Abu Dhabi and Luxembourg have revealed they’ve bought shares in BlackRock’s IBIT bitcoin fund.
Fink, speaking alongside Coinbase chief executive Brian Armstrong and New York Times journalist Andrew Ross Sorkin at a DealBook event, also warned that the U.S. risks falling behind other governments if it fails to embrace the trends of tokenization and artificial intelligence.
“If we don’t spend enough faster on digitization and tokenization, other countries will beat us,” Fink said, echoing a November warning from U.S. president Donald Trump that China is trying to take on the U.S. as the world’s “capital of crypto.”
Fink also dismissed the idea espoused by the likes of Warren Buffett that bitcoin is fundamentally worthless, calling it an “asset of fear” that falls when people are less “fearful.”
“You own bitcoin because you’re frightened of your physical security. You own it because you’re frightened of your financial security. The long-term fundamental reason you own it because the debasement of financial assets, because of deficits,” Fink said.
Meanwhile, Armstrong revealed some of the largest banks are working with Coinbase on stablecoins as well as crypto custody and trading, without naming them.
“Tokenisation could advance at the pace of the internet—faster than most expect, with enormous growth over the coming decades,” Larry Fink, who leads the $10 trillion BlackRock, wrote in The Economist, suggesting the market could grow at the same pace seen by the world’s biggest technology companies in recent years.
“If history is any guide, tokenisation today is roughly where the internet was in 1996—when Amazon had sold just $16 million-worth of books, and three of the rest of today’s “Magnificent Seven” tech giants hadn’t even been founded.”
Tokenization, the processes of creating a crypto-based, digital version of real-world and financial assets, has been popularized on Wall Street by Fink.
“In the future, people won’t keep stocks and bonds in one portfolio and crypto in another,” Fink wrote. “Assets of all kinds could one day be bought, sold and held through a single digital wallet.”
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The bitcoin price has dropped in recent weeks but remains far above the peak of its 2021 bull run.
Forbes Digital Assets
Fink threw BlackRock’s weight behind a decade-long push to bring a fully-fledged spot bitcoin exchange-traded fund (ETF) to Wall Street in 2023, calling it the first step towards a blockchain-based tokenized revolution that he believes will help democratize finance.
“Tokens that represent ‘real-world’ traditional financial assets (stocks, bonds and so on) remain a tiny share of global equity and fixed-income markets but are growing fast—up roughly 300% in the past 20 months,” Fink wrote, adding: “It started in 2009 when Satoshi Nakamoto, a pseudonymous developer, launched bitcoin as a shared digital ledger that could record transactions without intermediaries.”
BlackRock’s bitcoin ETF has led the market since a dozen such funds were launched in early 2023, far outpacing the growth of gold ETFs and opening the floodgates for many other cryptocurrencies to get ETFs of their own.
Fink’s support for bitcoin and crypto helped legitimize the technology that was generally dismissed by large swathes of traditional finance and paved the way for U.S. president Donald Trump to embrace bitcoin and crypto in the run up the 2024 presidential election that returned him to the White House.
“At first it was hard for the financial world—including us—to see the big idea,” Fink wrote. “Tokenization was tangled up in the crypto boom, which often looked like speculation. But in recent years traditional finance has seen what was hiding beneath the hype: tokenization can greatly expand the world of investable assets beyond the listed stocks and bonds that dominate markets today.”