BlackRock’s Head of Digital Assets Disputes the Classification of Bitcoin as a Risk-On Asset

On Wednesday, the head of BlackRock’s digital asset division sought to challenge the notion of Bitcoin being a risky investment amid the current downturn in the cryptocurrency market.

In a discussion on CNBC’s Squawk Box, Robert Mitchnick, the head of BlackRock Digital Asset, stated that the cryptocurrency sector has perpetuated the perception of Bitcoin as a risk-on asset, despite the fact that it is “global, scarce, non-sovereign, and decentralized.”

A risk-on asset refers to investments like stocks that carry some degree of potential financial loss for investors.

“What we’ve witnessed recently appears to be self-perpetuating and essentially a self-inflicted issue stemming from some of the industry research and commentary, embracing the notion of it as a risk-on asset at times,” Mitchnick mentioned to CNBC.

Early last year, U.S. regulators approved spot Bitcoin exchange-traded funds, expanding institutional access to the world’s first cryptocurrency. BlackRock’s bid for a Bitcoin ETF is widely seen as a crucial milestone in the efforts of issuers to obtain long-anticipated approval for these funds.

BlackRock’s pursuit of a Bitcoin ETF is often viewed as a pivotal moment for issuers seeking the long-desired approval of these financial instruments.

These ETFs currently manage approximately $100 billion in assets, with BlackRock’s iShares Bitcoin Trust (IBIT) accounting for $46.5 billion of that total. IBIT achieved $10 billion in assets faster than any fund in the 32-year history of the ETF industry.

The influx of institutional investment played a significant role in pushing Bitcoin to a record high of over $108,000 late last year. However, its highly volatile price has since dropped more than 20%, as investors contend with the implications of U.S. President Trump’s strict tariff policies and the looming threat of a recession. The funds experienced asset outflows for five consecutive weeks during this price decline.

Mitchnick contended that a significant economic downturn in the U.S. affecting Bitcoin’s price “doesn’t make much sense whatsoever.”

“It’s uncertain whether tariffs pose a fundamental threat to Bitcoin,” Mitchnick remarked. “[Regarding] economic concerns, whether or not we enter a recession, that could actually serve as a significant catalyst for Bitcoin.”

While rising interest rates might adversely impact Bitcoin’s value, this would also be the case for other asset classes, including equities, according to Mitchnick.

The executive pointed out that despite concerns regarding the potential impact of macroeconomic uncertainties on the cryptocurrency, Bitcoin’s price has increased approximately 15% since the start of November.

“Clearly, 2024 has been quite remarkable and historic,” he stated. “From a fundamental perspective, we believe that is the essence of the long-term view. That’s why it’s often referred to as digital gold.”

Edited by James Rubin