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While the bitcoin network was originally launched as a way to disrupt many aspects of the traditional financial system, some of the largest financial institutions and asset managers in the world are now becoming key nodes on the network.
Most representatives of the traditional financial system were extremely critical of bitcoin as an asset in its early days, but much of the sector has now come around to the idea that the cryptocurrency could at least operate as a potential source of portfolio diversification. With more institutional investors demanding access to bitcoin price exposure from their financial services providers, many of the largest asset managers and financial advisors in the world have completed a 180-degree turn in terms of their public statements on bitcoin and other cryptocurrencies.
With this in mind, let’s take a look at what the top five asset managers in the world (according to ADV Ratings) think about bitcoin.
1. BlackRock ($10.4 Trillion AUM)
BlackRock’s stance on bitcoin has evolved quite significantly in recent years. Initially, the firm was cautious about cryptocurrencies, viewing them as speculative and too volatile for institutional portfolios. In fact, BlackRock CEO Larry Fink referred to bitcoin as an “index of money laundering” back in 2017.
However, as digital assets matured and demand from investors grew, BlackRock has shifted its perspective. Indeed, as bitcoin infrastructure developed — such as the rise of secure custodial services and increased regulatory clarity — BlackRock saw potential in offering easier, more structured access to the asset. The firm also recognized bitcoin’s appeal to younger generations, high net worth individuals, and financial institutions who were increasingly demanding exposure to digital assets.
In 2023, the company made a bold move by filing for a bitcoin exchange-traded fund (ETF), which signaled a pivotal moment for institutional adoption of the cryptocurrency. This filing helped reshape how major financial institutions view cryptocurrencies due to BlackRock’s pivotal role in the global economy and its status as the largest asset manager in the world. Now, BlackRock manages the largest bitcoin ETF, known as the iShares Bitcoin Trust, offering streamlined access to the asset for traditional investors, without the security and usability burdens of direct cryptocurrency exchange trading.
Fink himself has also embraced bitcoin’s potential as a store of value, describing it as a way of “digitizing gold.” He emphasized the demand for transparent, digitized assets and recognized that bitcoin could play a significant role in diversifying portfolios. The BlackRock CEO has also highlighted how bitcoin and blockchain technology align with his vision of modernizing financial systems. Additionally, he expressed optimism about the transformative potential of digital versions of real-world assets (RWAs), noting that they can improve efficiency and transparency in the global financial system.
With all that said, BlackRock Head of Digital Assets Robbie Mitchnik has made it clear that there is not much interest from their institutional clients in digital assets outside of bitcoin, with some interest in Ethereum’s native ether cryptocurrency being the only slight exception to that general observation.
2. Vanguard ($9.3 Trillion AUM)
Vanguard has taken a notably conservative stance on bitcoin and other cryptocurrencies, at least when compared to the more proactive approach taken by some of its competitors on this list. The financial titan has often cited concerns about price volatility, lack of regulation, and the speculative nature of cryptocurrencies as key reasons for their caution. Vanguard has historically prioritized long-term, yield-producing investment strategies.
Digital assets like bitcoin, with their dramatic price swings, have not historically aligned with this philosophy.
In addition to not creating their own spot bitcoin ETF offering, Vanguard also does not even allow their clients to access crypto-related products on its brokerage platform. This strong resistance to allowing their clients any access to bitcoin price exposure clearly makes Vanguard the most critical asset manager on this list in terms of its view of the cryptocurrency asset class, and some bitcoin enthusiasts have even moved their assets elsewhere in response to this policy.
In a now-infamous post on its corporate blog from Vanguard Global Head of ETF Capital Markets Janel Jackson and multiple communications with investors, the firm has consistently emphasized the risks and volatility associated with digital assets. “In Vanguard’s view, crypto is more of a speculation than an investment,” said Jackson. “This is at the root of our decision to not offer crypto products, whether our own or others.”
Vanguard claims that cryptocurrencies lack intrinsic value since they don’t generate income like stocks or bonds, and are subject to extreme price swings, which makes them unsuitable for the average investor. For longtime cryptocurrency market observers, these takes can come off as extremely naive and outdated. Vanguard also warns that even a small allocation of bitcoin in a portfolio can dramatically increase risk due to its high volatility. Furthermore, Vanguard has pointed out that while blockchain technology, which underpins cryptocurrencies like bitcoin, has the potential to improve the existing financial order, cryptocurrencies themselves are not a fit for their investment offerings.
Of course, Vanguard’s past criticisms of bitcoin and other cryptocurrencies do not necessarily mean that they will continue to take this view in the future. In fact, the financial institution’s new CEO Salim Ramji was the ETFs lead at BlackRock at the time they launched their bitcoin ETF. Such leadership could push Vanguard to reconsider digital assets as viable investment options, allowing them the opportunity to catch up with their competitors in terms of exposure to the emerging digital asset class. While this is the first time Vanguard has hired a new CEO from an external source, whether it will lead to a change in its view of the cryptocurrency market remains to be seen.
3. Fidelity ($5.3 Trillion AUM)
Fidelity was among the first major institutions to offer services related to digital assets through the launch of Fidelity Digital Assets in 2018, which was established to provide institutional clients with custody and trading services for bitcoin and other cryptocurrencies. In fact, the financial giant was mining bitcoin in 2017 as a way to learn about this emerging asset class.
Fidelity views bitcoin as a distinct asset within the broader cryptocurrency ecosystem, often referring to it as “digital gold” due to its decentralized nature, scarcity, and use case as a store of value. While they support the development of and experimentation with other cryptocurrencies and blockchain-powered technologies, Fidelity emphasizes bitcoin’s unique potential to serve as an inflation hedge and a long-term investment, distinguishing it from other cryptocurrencies that may be more speculative or tied to specific, technology-focused use cases.
For individual clients, the firm provides a cryptocurrency trading platform through its Fidelity Crypto service, allowing users to buy and sell bitcoin and ether directly within their existing Fidelity accounts. This integration simplifies the process for retail investors looking to dip their toes into digital assets, while maintaining the familiar interface of their traditional investment platform. Additionally, Fidelity has launched spot bitcoin and ether ETFs, both of which are the third-largest offerings when compared to their respective competitors.
In a previous report, Fidelity recommended an allocation of up to 5% of a young investor’s portfolio. Additionally, Fidelity CEO Abby Johnson has also doubled down on her long-term conviction around bitcoin through multiple cryptocurrency bear markets.
4. State Street ($4.3 Trillion AUM)
State Street took its first significant steps into the cryptocurrency space in 2018 through a strategic partnership with cryptocurrency exchange Gemini. The partnership with the Winklevoss twins’ exchange enabled its clients to have a bridge between traditional finance and the burgeoning world of cryptocurrencies, and was initially focused on providing a reporting mechanism for users of Gemini’s custody services. This allowed State Street’s clients to consolidate their holdings of digital assets alongside traditional investments in a single interface.
Building on this early venture, State Street significantly expanded its cryptocurrency ambitions with the launch of State Street Digital in June 2021. This dedicated division represents a more comprehensive approach to digital assets and blockchain technology, and illustrates the firm’s long-term commitment to the sector. State Street Digital aims to evolve the company’s existing digital capabilities into a unified, multi-asset platform that integrates cryptocurrency, blockchain, and other emerging technologies. This expansion goes beyond mere custody services, encompassing areas such as tokenization, distributed ledger technology, and central bank digital currencies (CBDCs).
It’s possible that regulatory issues prevented State Street from getting more involved in bitcoin and other cryptocurrencies around the time State Street Digital was launched, as the original head of the subsidiary referred to the U.S. Securities and Exchange Commission’s (SEC) SAB 121 rule–where traditional banks are required to keep an equivalent amount of cash on hand for all of the cryptocurrency assets they custody on behalf of their clients–as an “insane” policy.
More recently, there has been a strategic overhaul of State Street Digital, which initially included layoffs at the State Street department focused on digital assets. Having said that, State Street Digital has also been rejuvenated with new projects and partnerships.
Notably, a specific project explored by State Street Digital included the potential issuance of a stablecoin backed by customer deposits, according to a report in Bloomberg. And while State Street did not get involved in the bitcoin and ether ETF boom of 2024, they’re exploring more advanced, managed cryptocurrency ETF offerings through a partnership with Galaxy Digital. While they’ve taken a more cautious approach than other asset managers on this list, it’s clear that State Street sees the potential of this technology and has plans to make up for lost ground.
That said, State Street is still very much in an exploratory stage when it comes to digital assets and blockchain technology in general. The financial institution’s stance on bitcoin and other cryptocurrencies remains unclear, as they’re involved with a number of experiments in distributed ledger technology (DLT) as well. For example, State Street is a shareholder in Fnality International, which is more about making traditional institutions more efficient and productive rather than building on an entirely new monetary system on the bitcoin network.
5. Morgan Stanley ($3.6 Trillion AUM)
Finally, the fifth-largest asset manager in the world, Morgan Stanley, perfectly illustrates the average traditional financial giant’s usual evolution on bitcoin and other cryptocurrencies. While one of the bank’s analysts claimed bitcoin’s value could be zero in 2017, another analyst recently referred to the cryptocurrency’s massive growth in 2024, in addition to the development of stablecoins and CBDCs, as potential threats to U.S. dollar dominance.
While not necessarily promoting the merits of bitcoin in the past, Morgan Stanley analysts have kept an eye on the digital sector as a whole, releasing reports on the future of the asset class on a somewhat regular basis. Additionally, Morgan Stanley had bitcoin on its books even prior to the approval of various spot bitcoin ETFs by way of holdings in the Grayscale Bitcoin Trust in various funds before it was converted to an ETF.
More recently, Morgan Stanley revealed holdings of $188 million worth of BlackRock’s iShares Bitcoin Trust, in addition to smaller holdings of two other spot bitcoin ETFs. Additionally, some of its financial advisors are now able to reach out to specific clients and recommend an allocation to bitcoin via the ETFs offered by BlackRock and Fidelity. This action followed a due diligence process where the bank did a deep dive on the merits of bitcoin and its potential long-term value proposition.
Despite this new activity around the bitcoin ETFs, the bank’s own view around the cryptocurrency remains unclear, as its former CEO and current executive chairman James Gorman referred to bitcoin as a speculative asset that should play a very small role in any wealthy individual’s portfolio as recently as January 2024. That said, it’s important to remember that there can be varying opinions within institutions as large as the ones included on this list.
What These Views Mean For Bitcoin
When looking at how the five largest asset managers in the world are currently valuing and interacting with bitcoin, it’s clear that “digital gold” is here to stay. The emergence of regulated spot bitcoin ETFs in the U.S. market absolutely changed how this asset is viewed in traditional finance, and it has even forced the hands of those who aren’t at all convinced of the cryptocurrency’s value proposition. Additionally, the claims from large banks that bitcoin is nothing more than a Ponzi scheme or some other type of speculative scam are almost entirely gone.
That said, it’s important to remember that the bitcoin network’s original purpose was to replace many of the services provided by the financial institutions covered in this list, namely in the areas of payments and value storage, with a more decentralized alternative. Additionally, the emergence of Ethereum has shown that there is the potential for further disruption through the decentralization of other financial activities, such as asset exchange and lending.
While protocols like Lorenzo are helping the bitcoin network develop into a complete replacement for the traditional financial services industry, institutions such as BlackRock, Fidelity, and others covered in this article will still have a major role to play in the coming years in terms of onboarding the average person to the world of decentralized finance.
These institutions will become increasingly involved as more regulatory clarity in the U.S. (where all of these institutions are based) is achieved, and they’ll also provide critical assistance to bitcoin as key nodes on the network offering ease of use, liquidity, and a higher degree of trust in the asset. For better or worse, this acceptance from institutions that people already trust can do wonders for how the masses view bitcoin.
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