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

In approximately 2023, when Bitcoin turned 15, it gained recognition from BlackRock, a prominent global investor, despite earlier skepticism from Wall Street. Previously, other financial institutions had backed Bitcoin, but BlackRock’s decision to file for a Bitcoin ETF and receive public endorsement from CEO Larry Fink marked a notable shift in perception.

Despite this, there was evident skepticism among a large segment of the investment community during a recent gathering in Miami specifically for financial experts, regarding Bitcoin.

At the Miami Investment Masters Symposium, Mike Green, a portfolio manager at Simplify Asset Management, expressed his viewpoint that Bitcoin is similar to a speculative bubble. In simpler terms, he believes that Bitcoin’s value is not based on any tangible asset or earning potential but rather on the hype and expectations of its price increase. Consequently, he sees it as a means for wealth to be shifted from one group of people to another.

Green explained that since there’s a market need for Bitcoin, Simplify is responding by providing it. However, his perspective remains unaltered – Bitcoin is merely an instrument for moving assets around, without generating new value or accomplishing anything in particular.

Bitcoin skepticism remains common

Some wealth management firms, such as Vanguard and State Street, are holding back on offering bitcoin ETFs to their clients despite strong demand for these new products. Only a handful of major firms have publicly disclosed that they allow investing in these funds, and it’s believed that the majority of trading volume comes from individual investors rather than institutional ones.

Goldman Sachs, which serves an essential function for BlackRock’s iShares Bitcoin Trust (IBIT) as an authorized participant, recently restated its viewpoint that bitcoin is not suitable for investment portfolios. The financial behemoth also expressed that their clients have shown little to no interest in cryptocurrencies.

Kathryn Vera, Stone X Group’s leading strategist, spoke at the Miami conference, sharing her belief that bitcoin would not become a global reserve currency – a term used in economics to describe currencies like the dollar, euro, or yuan held by central banks for financial and trading purposes – during her lifetime. The significance of conventional currencies as reserves lies in their role as pillars of finance.

Peter Schiff, a gold advocate and economist, dismissed bitcoin as worthless gambling money with no practical application now or in the future during a recent event. Bitcoin reached an all-time high of over $73,000 at the time of his statement, prompting him to warn that it was just a bubble waiting to burst.

Some asset managers have taken a definitive stance on investing in Bitcoin, while others remain undecided due to the lack of pressing need to do so. The recent introduction of 11 Bitcoin ETFs in the U.S., including those from BlackRock, Fidelity, and Grayscale, aim to simplify the investment process for buyers of Bitcoin.

Green admitted that his company hasn’t received significant demand for bitcoin from their clients. However, he acknowledges that this could be due in part to the fact that they don’t aggressively promote the cryptocurrency or recommend it as an investment option.

An unidentified asset manager shared that their company is generating substantial profits for clients, making the addition of bitcoin unnecessary due to its demanding forecasting requirements. “Our business thrives with this focus,” the manager stated.

Green points out that many of his colleagues are reluctant to put in the effort to deeply grasp the technologies behind bitcoin and other cryptos, as they currently face no compulsion from clients to do so. Moreover, expressing criticism or doubt towards cryptocurrencies doesn’t seem to bring any unfavorable consequences, he added.

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

He expressed that people find it challenging to fully commit to learning about bitcoin due to its complexity, leading them to lose interest.