Don't look to BlackRock Inc. to revive demand for cryptocurrencies. The world's largest asset manager isn't buying, because its clients have zero interest.
"I don't believe any client has sought out crypto exposure," CEO Larry Fink said in an interview Monday. "I've not heard from one client who says, 'I need to be in this.'"
That means not even a fraction of BlackRock's $6.3 trillion has been invested in bitcoin, Ether or any of the other so-called coins, and it signals that institutions remain skeptical of cryptocurrencies as an asset class.
For now, Mr. Fink said, BlackRock is studying coins to see how they perform and to determine whether they become "legitimized" as alternatives to cash.
Unlike Wall Street investment banks such as Goldman Sachs Group Inc. and JPMorgan Chase & Co., BlackRock doesn't have infrastructure to buy or sell crypto, whether in actual coins or bitcoin futures. When asked if he feels the need to be prepared for the day when clients might want exposure, Mr. Fink said, "at the moment, no."
Financial News reported Sunday that BlackRock formed a team including multi-asset strategist Terry Simpson to investigate ways of taking advantage of cryptocurrencies and blockchain, the computer code that underpins them. While downplaying his firm's interest in crypto, Mr. Fink said he's "very excited" about blockchain technology, possibly as a means to enhance BlackRock's Aladdin system for risk management, portfolio management and trading.
Institutional investors have been reluctant to embrace cryptocurrencies, in part because of the collapse in prices since December but also because of illiquidity, theft, fraud and the lack of custody services. If Mr. Fink's posture is any guide, it may be a while longer before they do.