Larry Fink: Sovereign Wealth Funds Bought Bitcoin Amid Drop; Tokenization to Expand
BlackRock CEO Larry Fink said sovereign wealth funds used the recent Bitcoin price decline as a buying opportunity, accumulating long-term positions rather than trading short term. He said some bought after Bitcoin fell from about $126,000 and added around $80,000, and noted increased institutional demand for spot Bitcoin ETFs such as BlackRock’s IBIT, which has drawn billions since early 2024. Fink warned the market is highly leveraged and volatility may rise after two major price shocks since October, signaling structural risk. He also forecast “extraordinary growth” in tokenization of crypto-based assets in coming years. The comments came as Bitcoin rallied roughly 10% to above $93,000 amid speculation the Federal Reserve may pivot, pushing Bitcoin’s market cap toward $2 trillion. Recent disclosures showed Abu Dhabi and Luxembourg sovereign funds took stakes in IBIT, highlighting growing state-level and institutional interest. For traders: expect continued institutional buy-side support that can underpin price floors over the medium term, but prepare for heightened short-term volatility driven by leverage, macro shifts (Fed policy) and ETF flows.
Bullish
Institutional and sovereign accumulation of Bitcoin, plus large inflows into spot Bitcoin ETFs (e.g., IBIT), are supportive for Bitcoin’s price over the medium term — they increase durable buy-side demand and can establish higher price floors. The disclosure that sovereign wealth funds bought into IBIT reinforces state-level participation, which tends to be long-term and reduces the share of purely speculative supply. However, Fink’s warning about high leverage and recent price shocks implies elevated short-term volatility: leveraged positions can amplify downswings and create episodic sell pressure. Macro drivers (Federal Reserve policy expectations) and sizable ETF flows will likely cause sharp intraday and multi-week moves even as institutional demand provides structural support. For traders, that translates to a bullish medium-term bias with tactical risk: prefer position sizing that accounts for potential volatility spikes, use staggered entries or hedges around macro events, and monitor ETF flows and leverage metrics for short-term risk signals.