Larry Fink Says Bitcoin's Leverage Problem Is Fixed as South Korea and Japan Rewrite Their Crypto Laws
BlackRock CEO Larry Fink went on CNBC this week to talk about leverage in the Korean stock market. He ended up talking about Bitcoin instead, and what he said lines up with two major regulatory shifts happening on the other side of the world at the same time.
THE PIVOT ON CNBC
During an interview on CNBC's Squawk on the Street on July 15, Fink was asked directly about leveraged risk in South Korea's Kospi index, which had been swinging wildly. Fink was asked about the potential risks posed by leveraged speculation in the Bitcoin and crypto markets, and while he considers leverage in the current financial system to be significantly lower than before the 2008 to 2009 financial crisis, he specifically pointed to leverage in Bitcoin and altcoins.
He did not stay on Korea for long. "I was always worried about the leverage in bitcoin and crypto. There were too many leveraged players in it. That's why we had to wash out, and I think there's more stability at these levels," he said. He wrapped up with a broader call on markets. "As I said in my prepared remarks this morning, I'm very bullish on the markets over the next 12 months," Fink stated.
WHY THE LEVERAGE COMMENT MATTERS
Fink has not always talked about Bitcoin this way. In 2017, he described Bitcoin as an "index of money laundering." He then changed his tune in 2023, when BlackRock filed for what would become the industry's largest spot Bitcoin exchange-traded fund. Now he is crediting a leverage flush, not a price collapse, for making Bitcoin more attractive. Bitcoin crashed in early October last year after surging to its all-time high, wiping out tens of billions in value and triggering the largest liquidation event in crypto history, a sell-off some observers called a necessary reset that flushed excess leverage out of the system. The traders who blew up in that crash are the same ones Fink is describing as gone.
He was careful to note the cleanup is not total. The BlackRock CEO said leverage had become less significant relative to the size of global capital markets, although he acknowledged that isolated risks remained, adding "the leverage is not as large" but "that doesn't mean there are not pockets."
SOUTH KOREA REWRITES ITS ASSET RULES
On July 15, South Korea's Ministry of Economy and Finance announced it will replace the country's 76-year-old asset framework. The National Asset Basic Act sets rules for how the government handles assets it already owns or comes to own, including seized crypto, state-held IP, and traditional property, since the ministry argued the 1950 framework makes it hard to manage newer asset classes with any rigor. State assets have grown from 188.3 trillion won in 2001 to more than 1,400 trillion won, about $938 billion.
It is worth being precise about what this law actually is. A caveat worth stating plainly is that this is a management law, not a strategic Bitcoin reserve. Separately, the ministry confirmed continued work on the Bank of Korea's digital currency project and renewed its push on the Digital Asset Basic Act, the comprehensive crypto framework meant to govern stablecoins, exchanges, and issuers, though that bill has been stuck for months as the Financial Services Commission and the central bank fight over who licenses won-pegged stablecoin issuers. That separate bill is also the one expected to open the door to spot crypto ETFs.
JAPAN MOVES CRYPTO INTO SECURITIES LAW
The same week, Japan's parliament finished its own overhaul. Japan's parliament passed an amendment on Wednesday that reclassifies cryptocurrency as a financial asset, a shift that pulls Bitcoin and other digital assets out of the country's payments regime and into the framework that governs stocks, bonds, and investment trusts, stripping crypto of its prior status under the Payment Services Act and folding it into the Financial Instruments and Exchange Act. NHK reports the change takes effect within a year, with a target of fiscal 2027.
The reclassification opens a path for spot Bitcoin exchange-traded funds, since moving crypto under FIEA's umbrella removes a structural barrier that kept Japanese asset managers from launching regulated Bitcoin ETFs. It also clears the way for a tax overhaul, cutting Japan's crypto tax rate from as high as 55 percent to a flat 20 percent, tied to the 2026 Tax Reform Outline and set to activate in 2028.
WHAT IT ADDS UP TO
Two of Asia's largest economies rewrote their crypto rulebooks in the same 48 hours that the world's largest asset manager went on television and said the leverage that used to scare him out of Bitcoin is gone. None of these three things are formally connected. But the direction is consistent: institutions and governments are treating Bitcoin as an asset worth building rules around, right as the retail leverage that used to drive its wildest swings gets wiped off exchanges. The unresolved piece is domestic. South Korea's actual crypto rulebook, the Digital Asset Basic Act, is still stuck in a fight between regulators over who licenses stablecoin issuers, and that bill, not the asset management law, is the one that will determine whether Korean spot ETFs and reserve-style holdings actually happen.
