BlackRock CEO Publicly Admits Mistake: Once Misjudged Bitcoin, Now a "Fear Asset" and New Favorite for Derivatives

Larry Fink, CEO of global asset management giant BlackRock, recently publicly admitted that his early views on Bitcoin and cryptocurrencies were wrong, and has redefined Bitcoin as a “fear asset.” This statement comes as BlackRock’s spot Bitcoin ETF, IBIT, hits a new milestone: its options open interest has soared to around 7.9 million contracts, ranking it among the top nine in the entire US options market. Fink directly links Bitcoin demand to geopolitical risks, fiscal deficits, and concerns over asset devaluation, and revealed that IBIT has experienced its third correction of about 20% to 25% since launch. The financial titan’s change in attitude, together with market data, outlines Bitcoin’s increasingly complex position within the traditional financial system.

Fink’s Major Turnaround: From Skepticism to Embracing the “Fear Asset”

Larry Fink, head of BlackRock—the world’s largest asset management company—has completed a highly symbolic public pivot. He recently admitted that his past views on Bitcoin and cryptocurrencies were “wrong.” This admission is not merely a general statement, but comes with a whole new explanatory framework tightly connected to traditional macro narratives. Fink refers to Bitcoin as a “fear asset,” with its holding motivations directly stemming from deep concerns about security and wealth.

Specifically, Fink ties Bitcoin’s recent price fluctuations to swings in global geopolitical risk. For example, when news of a US-China trade agreement eases market tensions, Bitcoin’s price declines. Similarly, recent discussions of a possible resolution to the Ukraine conflict also caused Bitcoin to fall. In his view, this linkage clearly shows that Bitcoin serves as a barometer of market “fear sentiment” and “demand for safety.”

Beyond geopolitics, Fink connects demand for Bitcoin to broader macroeconomic unease, especially concerns about government fiscal deficits and fiat asset devaluation. He acknowledges that this “fear-driven” demand is real and strong, enough to even impact the performance of large investment portfolios. While he does not describe Bitcoin as a stable asset, its low correlation with traditional assets could make it a component of diversified portfolios.

How Is “Fear” Priced? Analyzing Bitcoin’s Macro Hedging Logic

Fink’s concept of a “fear asset” offers a novel perspective for understanding Bitcoin’s value from a traditional financial viewpoint. This framing goes beyond the simple dichotomy of “digital gold” or “speculative tool,” embedding it within the macro framework of global capital flows and risk pricing. When investors worry about sovereign credit, currency purchasing power, or regional security, Bitcoin—decentralized and censorship-resistant—becomes a potential hedging choice.

However, Fink does not shy away from pointing out the challenges of this “insurance” logic. He asks: If someone bought Bitcoin near $125,000 as a hedge, and now the price is fluctuating above $90,000, does that count as a successful hedge? His answer: It entirely depends on the nature of the position—is it a short-term trade with clear intent, or a long-term strategic hedge? This question sharply highlights the complexities and difficulties of using Bitcoin for risk management, as its high volatility can distort hedging effectiveness.

For short-term traders, Fink warns that volatility remains the main risk, and successful trading requires precise timing—something most market participants lack. He further notes that leveraged traders continue to exert significant influence on the Bitcoin market, amplifying volatility and making pure short-term price speculation extremely risky. Therefore, for ordinary investors, understanding Bitcoin’s “fear asset” nature should focus more on its long-term strategic allocation value in extreme macro scenarios, rather than short-term price speculation.

Key IBIT Options Market Data Overview

Milestone Status: IBIT’s options open interest ranks among the top nine of all US option contracts (including stocks, ETFs, and indices).

Specific Data: As of the latest data, IBIT options open interest is 7,901,926 contracts.

Growth Rate: Just about a year after the spot ETF was listed, its options market has already reached this scale, showing rapid growth in derivatives demand.

Price Background: Fink revealed that since IBIT’s launch, it has seen its third net value drawdown of about 20% to 25%.

IBIT Options Trading Booms, Traditional Finance Deeply Integrates with Crypto Market

At the same time Fink is redefining Bitcoin, BlackRock’s spot Bitcoin ETF IBIT is also setting remarkable records in the traditional financial derivatives market. Data shows that IBIT options open interest has reached approximately 7.9 million contracts, putting it ninth overall in the US options market alongside many major single-stock, ETF, and index options.

This achievement is significant. It means that just a year after the spot ETF was approved and listed, the derivatives market based on it has already developed significant depth and liquidity. The active options trading indicates that institutions and sophisticated investors are actively using more complex financial instruments to manage Bitcoin risk exposure, express price views, or conduct arbitrage. The use of call options, put options, and various combination strategies provides the market with more price discovery mechanisms and risk management tools.

The prosperity of the IBIT options market is further evidence that Bitcoin is being rapidly absorbed by the traditional financial system. It is no longer just a spot product to be bought and sold, but has become a mature asset class with a full derivatives ecosystem. This deeper integration brings greater liquidity and more participants, but may also introduce more complex volatility and systemic risk transmission paths—precisely what Fink alluded to when mentioning “leveraged players influencing the market” in this new era.

The Giant’s Shift: Bitcoin Narrative Evolution and a New Market Phase

Larry Fink’s shift from skeptic to advocate is not an isolated event, but a microcosm of Wall Street’s evolving understanding of Bitcoin. His “fear asset” theory actually frames Bitcoin within the context of traditional macro analysis, giving it a “justifiable” place in large institutional asset allocation. While this positioning may not sound as exciting as “revolutionary currency,” it is more practical and persuasive, and easier for mainstream finance to understand and accept.

This narrative evolution is also accompanied by the maturing of product forms. From spot ETFs to booming options markets, Bitcoin investment channels are becoming increasingly diverse and institutionalized. For investors, this means lower participation thresholds and more strategy tools. However, Fink’s warning still rings true: greater variety of tools does not mean lower risk. Bitcoin’s inherent high volatility, its susceptibility to leveraged capital, and its close yet unpredictable correlation with macro sentiment all require investors to have a higher level of risk awareness and management capability.

Looking ahead, Bitcoin’s journey in the traditional financial world will be a continuous collision and integration of its native crypto attributes with external macro forces. Fink’s shift in attitude and IBIT’s success mark the end of the “acceptance or not” debate, and the industry is now entering the deep waters of “how to price, allocate, and manage.” In this new phase, understanding Bitcoin requires a more multidimensional and in-depth approach—recognizing its potential as a technological innovation, but also being fully aware of the challenges it faces as a new risk asset class.

What Is a “Fear Asset” and the Evolution of Wall Street’s Attitude

Other Examples of “Fear Assets” in Traditional Finance

In traditional financial markets, “fear assets” typically refer to assets sought by investors during market turmoil or crises to hedge and preserve value. The classic example is gold, which tends to perform well during war, inflation, or financial crises. The Swiss franc, due to the country’s long-term political neutrality and financial stability, is also seen as a traditional safe-haven currency. In addition, US Treasuries—especially long-term bonds—often see price increases during periods of global panic as capital flows in. By categorizing Bitcoin as such, Fink is essentially drawing an analogy with traditional safe-haven assets, even though the volatility and driving logic of the two differ significantly.

The “It Really Is Good” Evolution of Wall Street Giants on Bitcoin

1. Early Rejection (around 2017): JPMorgan CEO Jamie Dimon called Bitcoin a “fraud,” and Warren Buffett compared it to “rat poison.” Mainstream financial institutions generally held skeptical and negative views.
2. Cautious Exploration (2020-2022): As institutional client demand emerged, Goldman Sachs, Morgan Stanley, and others began offering crypto-related services or investment channels. Asset managers like BlackRock also began research in the field.
3. Full Embrace (2023 to present): Marked by giants like BlackRock and Fidelity filing for spot Bitcoin ETFs, Wall Street has shifted from service providers to direct product issuers and key participants. Fink’s recent admission of error and systematic articulation of Bitcoin’s positioning can be seen as a theoretical summary and public conclusion of this stage.

Larry Fink’s “I was wrong” is less a personal reflection and more a formal “recognition” of Bitcoin by the traditional financial system. Defining Bitcoin as a “fear asset” may seem to dull its technological revolutionary edge, but in fact pries open a solid door for its inclusion in trillion-dollar traditional asset allocations. When IBIT’s options trading volume stands alongside those of Apple and the S&P 500 index, we can already see the accelerated convergence of crypto and mainstream financial markets. The future contest is no longer about “whether to enter,” but about how to safely navigate and capture value in these deep waters where old and new rules blend, and volatility and opportunity coexist. For every market participant, understanding the real demand behind this “fear” may be more important than simply predicting the next price point.