Bitcoin should not be in the risk asset category, says BlackRock executive Robert Mitchnick. The head of digital assets of the financial giant assures that there is a wrong understanding about the nature of this token. In that sense, labeling it as a high-risk asset is not the correct interpretation, since it contradicts the characteristics of the currency.
In a recent interview with Yahoo Finance, Mitchnick laments that a misinterpretation of the currency is so consistently widespread. “We think there’s kind of a misunderstanding that, frankly, has been perpetuated by crypto research and other publications that characterize Bitcoin as a risk asset,” he commented.
He concedes that BTC is a risky asset with notable volatility, which is related to its short existence and low capitalization. However, this reality is very different from saying that it is a risk asset, he emphasizes. In the latter case, the currency should rise and fall along with stock market actions, something that clearly does not happen to a large extent, he implies.
The correlation of Bitcoin with stocks is a topic that is constantly evolving. While in the period from 2020 to 2022 the correlation was high, in recent times it has decreased significantly. The latter is evident in the performance since March of this year. While the Nasdaq was setting new highs, BTC was in a stagnation stage.
BlackRock maintains its bet on Bitcoin
According to the aforementioned BlackRock executive, Bitcoin is an asset that has its own qualities and its nature is more similar to that of gold. This means that it is increasingly improving its performance as a hedge against inflation. In this way, the factors that influence the performance of BTC are different from those that move the stock market.
It is essential for institutional investors and wealth advisors to recognize these differences, he said. The role that Cryptocurrency plays in a portfolio and in appropriate investment strategies may depend on the latter, he highlighted.
He highlighted that the currency has the possibility of providing coverage against enormous global macroeconomic risks. Among them he cited the United States debt, inflation and others. With this perspective, BlackRock’s vision pushes towards a change in the perception of Bitcoin among large wallets. The firm seems determined in its commitment to this digital asset and its transformative capabilities.
For years, the executives of this company have expressed their enthusiasm for the largest cryptocurrency. So much so, that they never gave up in their fight to launch a spot ETF of the currency on the stock market of the North American country. Now, the firm remains at the forefront of the injection of institutional capital into BTC.
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