Bitcoin and cryptocurrency prices have rebounded this week as the market anticipates a major Federal Reserve policy shift in December.
Bitcoin has surged 10% to top $93,000, marking its best day since May and bringing it close to a $2 trillion market capitalization. This recovery comes after the price dipped below $84,000 earlier in the week.
Sovereign Funds Buying Bitcoin Dips
BlackRock CEO Larry Fink has revealed that unnamed sovereign wealth funds are actively buying bitcoin during recent price declines.
"There are a number of sovereign funds that are standing by," Fink said, adding they're purchasing "incrementally" as bitcoin has fallen from its $126,000 peak.
"I know they bought more in the 80s. And they're establishing a longer position. And you own it over years. This is not a trade. You own it for a purpose," Fink explained, referring to two major bitcoin price swings since October that have sent prices lower.
In recent months, sovereign funds in Abu Dhabi and Luxembourg have disclosed purchases of shares in BlackRock's IBIT bitcoin ETF.
U.S. president Donald Trump met BlackRock chief executive Larry Fink during Trump's first term in the White House—before either of the pair began supporting bitcoin and pushing up the bitcoin price.
U.S. Risks Falling Behind in Digital Revolution
Speaking alongside Coinbase CEO Brian Armstrong and New York Times journalist Andrew Ross Sorkin at a DealBook event, Fink warned that the United States risks falling behind other countries if it fails to embrace tokenization and artificial intelligence trends.
"If we don't spend enough faster on digitization and tokenization, other countries will beat us," Fink said, echoing a November warning from President Donald Trump that China is attempting to become the world's "capital of crypto."
Fink also dismissed arguments that bitcoin is fundamentally worthless, calling it an "asset of fear" that declines when people feel less fearful.
"You own bitcoin because you're frightened of your physical security. You own it because you're frightened of your financial security. The long-term fundamental reason you own it is because of the debasement of financial assets, because of deficits," Fink explained.
Tokenization: The Next Internet-Scale Opportunity
In a separate article for The Economist, Fink predicted "enormous growth" for crypto-based tokenization in coming years, comparing it to the early days of the internet.
"Tokenisation could advance at the pace of the internet—faster than most expect, with enormous growth over the coming decades," wrote Fink, who leads the $10 trillion asset manager.
"If history is any guide, tokenisation today is roughly where the internet was in 1996—when Amazon had sold just $16 million-worth of books, and three of the rest of today's 'Magnificent Seven' tech giants hadn't even been founded."
Tokenization, which involves creating crypto-based digital versions of real-world and financial assets, has gained significant traction on Wall Street through Fink's advocacy.
"In the future, people won't keep stocks and bonds in one portfolio and crypto in another," Fink wrote. "Assets of all kinds could one day be bought, sold and held through a single digital wallet."
BlackRock's Transformative Role
Fink threw BlackRock's considerable weight behind the push for a spot bitcoin ETF in 2023, calling it the first step toward a blockchain-based tokenized revolution that could democratize finance.
"Tokens that represent 'real-world' traditional financial assets (stocks, bonds and so on) remain a tiny share of global equity and fixed-income markets but are growing fast—up roughly 300% in the past 20 months," Fink noted.
BlackRock's bitcoin ETF has dominated the market since a dozen such funds launched in early 2023, significantly outpacing the growth of gold ETFs and opening doors for other cryptocurrencies to receive their own ETFs.
Fink's support for bitcoin and crypto has helped legitimize the technology within traditional finance and paved the way for President Trump to embrace cryptocurrency during his 2024 presidential campaign.
"At first it was hard for the financial world—including us—to see the big idea," Fink acknowledged. "Tokenization was tangled up in the crypto boom, which often looked like speculation. But in recent years traditional finance has seen what was hiding beneath the hype: tokenization can greatly expand the world of investable assets beyond the listed stocks and bonds that dominate markets today."
The bitcoin price has dropped in recent weeks but remains far above the peak of its 2021 bull run.
Banking Sector Embracing Crypto
Meanwhile, Coinbase CEO Brian Armstrong revealed that some of the largest banks are working with Coinbase on stablecoins, crypto custody, and trading services, though he didn't name specific institutions.
This collaboration signals growing institutional acceptance of cryptocurrency infrastructure within the traditional banking sector.
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