BlackRock CEO Larry Fink’s Annual Letter: Bitcoin ETF Success, Pension Crisis, and Environmental Protection

2024-04-14 19:06:13

Larry Fink, the CEO of BlackRock, sent his annual letter to the CEOs and investors, in which, in addition to his personal story, he gave an account of the business results achieved in the past year. One of the world’s largest fund managers, in addition to writing about the success of the Bitcoin spot ETF, highlighted the crisis in the American pension system and the importance of environmental protection.

As is known, BlackRock is one of the fund managers who received permission from the SEC to sell Bitcoin spot ETFs in January 2024, and the inflow of IBIT exceeded $15 billion in 3 months. However, this is a minuscule part of the $10,000 billion managed by BlackRock, which makes the company the world’s largest fund manager.

BlackRock achieved significant growth

Fink from his letter it turns out that the assets managed by BlackRock exceeded 10,500 billion dollars, with which they consolidated their place in the ranking of fund managers. Thanks to a strong stock market and a successful Bitcoin ETF, the company’s sales increased 36%, resulting in a net profit of $1.57 billion in the first fiscal quarter. Based on data from Fairside Investors, the company currently holds $15.25 billion in the Bitcoin spot ETF with the ticker IBIT, making it by far the largest holder with the exception of Grayscale – ahead of Fidelity ($8.05 billion) and ARK ($2.25 billion).

By the way, the application at the end of March shows the company’s adaptation to the cryptocurrency market BlackRock USD Institutional Digital Liquidity Fund called RWA product, which may favor tokenization of real-world assets. Although the allocation of the underlying assets is unclear, it is conceivable that the company will convert real estate into blockchain tokens, thereby increasing liquidity and market accessibility. Of the 12 RWA projects monitored by BlackRock, it is worth mentioning Realio ($RIO) and Mantra Network ($OM), which have shown an incredible rise since the discovery.

Concerns about the system

Despite the fact that the company reported extraordinary growth, the net inflow of $57 billion was still short of BlackRock’s expectations, which they attribute primarily to the FED’s record high interest rates. According to Fink, people are extremely hesitant to part with their accumulated cash because people are hesitant to jump back into stocks and bonds. According to the CEO of BlackRock, the loosening of monetary policy and the interest rate cuts announced for this year may bring the turn for clients to invest in risky assets again.

More than half of the assets managed by BlackRock are tied up in pension funds, which Fink drew the attention of clients to. According to the 71-year-old billionaire, the pension and social security system of the United States is not sustainable in its current form, and they must work together against this at the institutional level.

Institutional structure, environmental protection and climate change

The CFO of BlackRock, Martin Small, of course also addressed the structural structure of BlackRock and the fact that they are keeping the company’s staff stable, as they have always done in recent years. According to Small, artificial intelligence (AI) does not pose a threat to employees’ positions, he sees AI tools as capable of increasing efficiency. By the way, BlackRock shares did not react very well to this news (NYSE: BLK – $763.40)which fell by 2.87% on Friday, and by almost 5% this year.

BlackRock has always held the issue of sustainability and environmental protection close to its heart, which is why they continued to increase their investments in industries advocating the reduction of carbon dioxide emissions and the promotion of digitalization. Fink said that last year he had a discourse with the leaders of 17 countries about climate change and investor responsibility, and they came to the conclusion that in the future green energy should be prioritized and fossil fuels should be reduced.

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