BlackRock's Larry Fink says institutional clients focus more on climate, inflation than bitcoin

Key Points
  • Climate change and inflation risk are bigger concerns for BlackRock's institutional clients than cryptocurrencies, CEO Larry Fink told CNBC.
  • "We're studying it. We make money on it, but I'm not here to tell you that we're seeing broad-based interest by institutions worldwide," he said.
BlackRock's Larry Fink: Institutional clients fascinated by crypto but not that interested

BlackRock CEO Larry Fink told CNBC on Thursday that the world's largest money manager has more discussions with its institutional clients on issues around climate change and inflation than it does on cryptocurrencies.

"Our broad-based client relationships, we've had very little interconnectivity on the conversation on crypto other than a fascination," Fink said in a "Squawk Box" interview.

The BlackRock co-founder and chairman believes crypto can "become a great asset class," acknowledging his firm made some moves into bitcoin.

"We're studying it," Fink said. "We make money on it, but I'm not here to tell you that we're seeing broad-based interest by institutions worldwide."

"Maybe they're talking to somebody else, so I don't want to suggest that we have perfect information," he added, shortly after BlackRock reported better-than-expected earnings and a record $9 trillion in assets under management.

The price of bitcoin has soared since last year, trading above $62,000 per coin Thursday morning. As recently as October, the world's largest cryptocurrency by market value traded below $11,000. 

Institutional adoption of bitcoin has been cited as one factor propelling the rise. Companies such as Tesla have used cash on the balance sheet to buy bitcoin, and Wall Street firms Morgan Stanley and Goldman Sachs have separately announced intentions to offer their wealth management clients exposure to bitcoin.

For BlackRock's institutional clients specifically, Fink said other topics rank higher on the list of concern than digital assets.

"The amount of conversation we're having on climate risk and how they should navigate portfolios is a major component of the conversation," said Fink, who has become a leading voice on Wall Street around climate change and sustainable investing. "The conversations about our [budget] deficits and ... on inflation risk is far more dominant with our clients worldwide than the whole conversation about crypto."

Chris Ailman, chief investment officer of CalSTRS, told CNBC later Thursday that climate change "dominated" his recent conversation with Fink.

"I had a chance to talk to Larry directly just a week ago," Ailman said on "Squawk on the Street." "We didn't talk a lot about crypto, but it is on the research block for most institutions. A few of the endowments in the USA have dabbled in it, but right now it's all speculation."

While saying he believes crypto is "here to say," Ailman contended that it's too early to tell whether it represents an entirely new asset class.

"People haven't really decided because we don't have long of a trading history. All we have is a speculative ramp up and down and then back up again," he said. "Long term, it probably has an interesting place in the currency markets. It may be an asset class. I think it's more likely to be an alternative currency."

CalSTRS, which stands for California State Teachers' Retirement System, is the world's largest educator-only pension fund.

The comments Thursday from Fink and Ailman came one day after the largest cryptocurrency exchange in the U.S., Coinbase, went public on the Nasdaq. Coinbase's direct listing was heralded as the latest milestone in the growing acceptance of cryptocurrencies as an asset class. Coinbase finished Wednesday's session with a market cap of nearly $86 billion.

Fink also told CNBC he's "incredibly bullish" on the stock market right now. "I believe because of monetary stimulus, fiscal stimulus, the cash on the sidelines, earnings, the markets are OK. Markets are going to continue to be stronger," he said.

Investors need to watch bond market for warnings signs, says CalSTRS' Chris Ailman