Interesting Bitcoin Quote from BlackRock Senior Manager: “Consideration of Bitcoin as a Risky Asset May Be Incorrect”
A noteworthy statement regarding Bitcoin (BTC) has been made by a senior executive at BlackRock, the world’s largest asset manager.
Robbie Mitchnick, the head of digital assets at BlackRock, challenged the notion of Bitcoin being labeled as a “risky” asset, despite its recent correlation with U.S. stocks. In an interview with Bloomberg Television, Mitchnick emphasized the unique nature of Bitcoin, which aligns more closely with a “risk-off” asset traditionally seen as a safe haven during times of market uncertainty.
While stocks, commodities, and high-yield bonds are generally considered risky assets that perform well in periods of market optimism, assets like gold are favored during economic stress. Mitchnick drew parallels between Bitcoin and gold, noting that although both assets have experienced temporary correlation with stocks, their long-term correlation is close to zero.
“Gold exhibits many of the same patterns,” Mitchnick explained, adding, “During volatile periods, the correlation is close to zero in the long run.” He highlighted Bitcoin’s scarcity, decentralization, and lack of control by a single government as factors that make it more akin to a risk-free asset.
BlackRock, a prominent leader in ETFs, offers products that invest in both Bitcoin and Ethereum. While Bitcoin is often viewed by institutional investors as “digital gold” and a store of value during times of market stress, Mitchnick acknowledged that the narrative for Ethereum is “a little less clear.” Ethereum’s native cryptocurrency, ETH, is widely used in decentralized applications but has yet to establish the same reputation as a safe-haven asset.
Bitcoin has seen a 49% increase in value this year, while ETH has gained 15%, driven by the approval of ETFs holding both tokens earlier in 2024.
*This article does not constitute investment advice.
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