BlackRock’s Digital Asset Unit Addresses Bitcoin’s Perception

The leader of BlackRock’s digital asset unit aimed Wednesday to dispel perceptions of Bitcoin as a risky investment amid the current cryptocurrency market downturn.

In an interview with CNBC’s Squawk Box, BlackRock Digital Asset Head Robert Mitchnick stated that the cryptocurrency industry has promoted the idea that Bitcoin is a risk-on asset, despite its characteristics of being “global, scarce, non-sovereign, decentralized.”

A risk-on asset refers to investments like stocks that carry a possibility of financial loss to investors.

Mitchnick stated, “What we’ve seen lately seems to be self-fulfilling and actually a self-inflicted wound by some of the research and commentary that the industry does, leaning into this idea of it as a risk-on asset at times.”

U.S. regulators approved spot Bitcoin exchange-traded funds (ETFs) early last year, expanding institutional investors’ access to the cryptocurrency. BlackRock’s application for a bitcoin ETF is seen as a significant moment in the quest for these funds’ approval.

Currently, ETFs manage about $100 billion in assets, with BlackRock’s iShares Bitcoin Trust (IBIT) controlling $46.5 billion. IBIT reached $10 billion in assets faster than any fund in the ETF industry’s history.

This influx of institutional investment helped Bitcoin soar to an all-time high of over $108,000 late last year. However, the asset’s volatility led to a drop of more than 20% as investors reacted to U.S. President Trump’s tariffs and recession fears. The funds lost assets for five consecutive weeks during this downturn.

Mitchnick argued that concerns about a steep economic downturn affecting Bitcoin’s price “don’t really make any sense at all.” He commented, “It’s not clear that tariffs are fundamentally bad for Bitcoin. Regarding economic fears, while a recession could be a catalyst for Bitcoin, it’s unclear if we will have one or not.”

Although a potential interest rate hike may negatively impact Bitcoin’s value, it would also likely affect other asset classes such as equities, according to Mitchnick.

Despite macroeconomic uncertainties, he noted that Bitcoin is still up approximately 15% since the start of November.

“2024 was pretty incredible, pretty historic,” he reflected. “Fundamentally, we think that is what the long term holds. That’s why people think of it as digital gold.”

Edited by James Rubin