Even with BlackRock’s pivot to embrace Bitcoin, sparking a wave of acceptance among some major financial players, a palpable sense of skepticism lingers within the traditional finance community. At a recent investment gathering in Miami, while some have begun to endorse Bitcoin, many others remain staunchly unconvinced.
Persistent Doubts Among Traditional Asset Managers
While BlackRock has made headlines by filing for a spot Bitcoin ETF and through the vocal support of its CEO, Larry Fink, the response from the broader finance industry has been mixed. At the same event in Miami, significant doubts were voiced by finance professionals, including Mike Green, a portfolio manager at Simplify Asset Management. Despite offering Bitcoin-exposed funds, Green described Bitcoin as “an extractive bubble” and a mechanism for transferring wealth rather than creating it.
Other traditional asset managers have yet to be swayed towards Bitcoin. Large wealth management firms such as Vanguard and State Street remain hesitant, with no plans to offer Bitcoin ETFs to their clients. This reluctance seems rooted in the cryptocurrency’s perceived volatility and speculative nature, with only a select few firms allowing investments in Bitcoin ETFs, primarily driven by retail investors.
Industry Opinions Remain Divided
Despite the growing availability of Bitcoin investment products, many in the industry continue to express strong reservations. Goldman Sachs, an authorized participant for BlackRock’s iShares Bitcoin Trust, recently reaffirmed its stance that Bitcoin does not belong in investment portfolios, citing a lack of client interest. Similarly, Kathryn Vera of Stone X Group dismissed the idea of Bitcoin becoming a reserve currency in the foreseeable future.
Criticism also came from economist Peter Schiff, who at the Miami event labeled Bitcoin as “gambling money” and predicted its eventual collapse, pointing to its speculative bubble nature. This sentiment reflects a broader trend of hesitation to fully engage with Bitcoin, stemming from its complex underlying technologies and a general disinterest from clients.
Despite some high-profile endorsements and the introduction of several Bitcoin ETFs aimed at simplifying investment, the finance industry remains sharply divided. While some see potential, the prevailing cautious stance and ongoing skepticism suggest that Bitcoin still has a long way to go before gaining universal acceptance within traditional financial circles.
