Larry Fink talks about Bitcoin as a "hedge against uncertainty," the investment philosophy of the $12.5 trillion giant

Larry Fink, Chairman and CEO of BlackRock, discussed his management philosophy learned throughout his career, the power of technological innovation, and his changing perspective on digital assets during a Legend Live event with Citigroup. How did the investment giant, managing $12.5 trillion in assets, build its position, and what are its future market outlooks? Here is a summary of key points from the dialogue that delves into Larry Fink’s core investment philosophy and management strategies.

Lessons on Leadership from Early Career Days

Larry Fink’s leadership philosophy has been heavily influenced by his childhood environment. His parents, socialists with broad-minded views, emphasized academic achievement and personal responsibility, teaching him, “If you’re not happy as an adult, it’s not your parents’ fault but your own.” This lesson fostered independence, and his experience working at a shoe store from age 10 laid the foundation for customer service and relationship building.

In January 1976, Larry Fink, a typical West Coast youth, saw snow for the first time during a job interview in New York. Assigned to First Boston, he started an exciting career in a small mortgage department with just three employees. At that time, the total capital of Wall Street investment banks was about $200 million. He was promoted smoothly, becoming the youngest managing director at age 27 and joining the executive committee at 31.

However, arrogance from success led to a major lesson. In Q2 1986, a division that had just posted record profits suddenly reported a $100 million loss. While celebrated as a hero during profitable times, 80% of employees withdrew their support after the loss. Fink faced two harsh realities: first, his thinking had not kept pace with market changes; second, he was blinded by ambitions to gain market share from competitors.

Through this failure, Fink realized the vulnerabilities within organizations, especially the lack of risk management tools. This experience laid the groundwork for cultivating a risk management culture that would underpin BlackRock’s growth.

Development of Risk Management Tools and BlackRock’s Foundation

After the failure at First Boston, Fink spent a year and a half rebuilding his career. Although offered partnership positions at multiple Wall Street firms, he decided not to follow the traditional path. Instead, he shifted to the buy-side market and contacted Steve Schwarzman.

Fink participated as one of the founders in establishing Blackstone. Despite only two of its eight employees being technologists at inception, in 1988, they invested in SunSpark Workstation, a technology priced at $25,000 that had just been launched. This proactive investment in technology enabled the development of proprietary risk management tools, becoming part of BlackRock’s DNA.

The true revolution on Wall Street was the personal computer. Fink states that the adoption of computers in the mortgage division in 1983 enhanced cash flow restructuring capabilities and led to derivatives trading such as interest rate swaps. Recognizing that sell-side (brokerage firms) technology always led the buy-side (asset managers), BlackRock was founded on a foundation of risk tools development.

Aladdin Platform and Government Support During the 2008 Financial Crisis

In 1994, during the bankruptcy of GE’s subsidiary Kidder Peabody, Fink demonstrated the power of the Aladdin system. While Goldman Sachs was expected to be involved, BlackRock used its own risk analysis platform to manage the liquidation of bad assets. Fink proposed that consulting fees be paid only upon success, and within nine months, the portfolio began generating profits, ultimately earning GE’s highest consulting fee ever.

A key leadership decision was to open the Aladdin system to all clients and competitors. This commitment to transparency became the foundation for gaining trust from the government during the 2008 financial crisis.

During the Bear Stearns crisis, BlackRock was urgently asked by JP Morgan Chase to support portfolio analysis. While conducting emergency analysis on Friday and Saturday, Fink maintained contact with the Treasury and the Federal Reserve. A call from Tim at 6 a.m. on Sunday led to the government directly hiring BlackRock, which then fully supported the US government’s response to the financial crisis. Subsequently, BlackRock was involved in restructuring AIG and crisis management for the governments of the UK, the Netherlands, Germany, Switzerland, and Canada.

Investment Strategy Shift in the AI Era and Democratization of Asset Allocation

Fink highlights that the biggest future trend transforming investment and asset management is AI (artificial intelligence) and the tokenization of financial assets. In 2017, BlackRock established an AI lab at Stanford University to develop algorithms analyzing an enormous volume of trading data totaling $12.5 trillion.

In the AI era, investors need the ability to “detect information that the market does not fully understand.” Old news no longer generates excess returns. Fink’s systematic equity team has outperformed the market for 12 consecutive years. AI algorithms and big data analysis have achieved returns exceeding 95% of fundamental-based asset managers over the past decade.

However, just as maintaining a batting average of 30% in baseball is difficult, sustaining an investment advantage is rare. Many active funds underperform after fees, which is a fundamental reason for the decline of active management. If active investing truly worked, the rapid growth of ETFs would not be possible.

The acquisition strategies in private equity also reflect this democratization trend. The acquisition of BGI in 2009 expanded the scale of iShares from $340 billion to nearly $5 trillion. Acquisitions of Preqin and E-Front accelerated the integration of public and private assets, enabling portfolio optimization for individual and institutional investors alike.

Why Perspectives on Bitcoin Have Changed and the Intrinsic Value of Digital Assets

Fink’s change in view on Bitcoin was driven by deep reflection during the pandemic. In 2017, he sharply criticized Bitcoin in a conversation with Jamie Dimon, calling it “a currency for money laundering and theft.”

However, during the pandemic, his perspective shifted after observing a case where Afghan women paid wages to employees in Bitcoin to avoid Taliban employment bans. In a highly controlled banking environment, digital assets became the only accessible solution.

Bitcoin is no longer just a “currency” but a “hedge asset” against an uncertain future. People hold Bitcoin due to concerns over national security and currency devaluation. Fink gradually recognized the irreplaceable value of blockchain technology.

The current BTC price is $89.44K (as of January 2026). Fink questions, “If you don’t believe the asset will appreciate over 20–30 years, why invest?” In rapidly changing, high-risk environments, continuous learning is essential, and clinging to old ideas is unwise. This philosophy reflects his shift in perspective on Bitcoin.

Fink’s Vision of Future Asset Management and the Importance of Continuous Learning

At the core of Fink’s leadership principles is “daily learning.” Stagnation means falling behind; there is no pause button in managing large corporations. Even with 50 years of industry experience, he commits himself to doing his best every day.

The essence of the asset management industry is results-oriented. Profitability depends on actual performance, not capital turnover or trading volume. In this industry, authority and influence are continually earned anew each day, never taken for granted, Fink emphasizes.

If the US economy cannot sustain a growth rate of 3%, the country’s fiscal deficit will become overwhelming. The deficit expanded from $8 trillion in 2000 to nearly $36 trillion in 2025. Foreign holders own 20% of US debt, and the role of the dollar is declining due to digital currencies and stablecoins. Facing these complex risks, unlocking private capital and simplifying regulations are urgent.

Fink engages in ongoing dialogue with experts across fields, including Cisco’s CEO and former Estée Lauder CEO, to update his perspectives and continue learning. Full commitment to this process is the only way to maintain influence and authority in the industry. From his changing views on Bitcoin to strategies integrating AI and digital assets, Fink’s ideas continue to evolve at the forefront of the market.