Bitcoin has mostly been labeled a “risk-on” asset by analysts, institutional investors, and experts. However, in his latest interview with Bloomberg on September 25, Blackrock’s Head of Digital Assets, Robbie Mitchnick, expressed a different view, saying they don’t consider Bitcoin a “risk-on” asset.
Taking a dig at crypto publications, Mitchnick noted that while Bitcoin is indeed a “risky” asset, publications have “extrapolated it to say that it is a ‘risk-on’ asset and that it should trade like equities.”
“Fundamentally, the drivers of Bitcoin are very different from those that drive equities in the long term,” he added.
Mitchnick further explained that they view Bitcoin more like gold. He elaborated: “Gold shares many similar patterns with Bitcoin, experiencing temporary spikes but staying close to zero long term.”
When asked about his thoughts on Nasdaq’s potential approval to list Bitcoin options and how that might impact position sizing, Mitchnick said it was a significant milestone but added that there is still more progress to be made before these options can begin trading.
Why Blackrock Executive’s Remarks Matter
Bitcoin is still widely considered a “risk-on” asset, which has limited the perceived potential of this advanced application of blockchain technology. Bitcoin has been labeled a bubble by prominent investors like Warren Buffet, who may still be expecting it to burst.
However, Mitchnick’s and Blackrock’s stance on Bitcoin not being a “risk-on” asset offers a chance to reassess the true potential of the leading cryptocurrency. Bitcoin operates independently of government policies and financial regulations across the world.
While critics argue that Bitcoin doesn’t create value, this claim is not entirely accurate. Bitcoin’s value lies in its potential to act as a hedge against inflation and shifts in monetary policy. Its scarcity, similar to precious metals, gives it intrinsic value. Bitcoin is limited in supply and can be used as a store of value, just like other asset classes.
Furthermore, unlike equities, Bitcoin’s value isn’t tied to a company’s balance sheet. As investment and fund management companies like Blackrock begin to challenge the narrative of Bitcoin being a “risk-on” asset, it may help bolster investor confidence.
Blackrock is not alone in pitching for Bitcoin’s long-term potential. MicroStrategy boss Michael Saylor has recently predicted that bitcoin can reach $13 million by 2045.
