BlackRock Crypto Head Mitchnick Sees Bitcoin as ‘Risk-Off’ Asset
(Bloomberg) -- Even though Bitcoin has been highly correlated as of late with the price moves of US equities, BlackRock Inc.’s head of digital assets says its a likely misnomer to call the cryptocurrency a “risk-on” asset.
Stocks, commodities and high yield bonds are generally considered risk-on assets since they usually perform well during periods of market optimism and economic expansions. Assets such as gold are often popular with investors during times of uncertainty.
“Gold shows a lot of the same patterns,” BlackRock’s Robbie Mitchnick said in a Bloomberg Television interview Tuesday. “Where you have these temporary periods, but long term [correlation is] close to zero.”
Because no single country or government controls Bitcoin, and it’s scarce and decentralized, “you would base it as risk- off,” he said.
BlackRock runs exchange-traded funds, investing in Bitcoin and Ether. But while many investors view Bitcoin as digital gold — something that holds value at times of stress — the narrative for Ether among many institutional clients “is a little less clear,” Mitchnick said. Ether is used by a variety of apps on the Ethereum blockchain.
Bitcoin is up 49% so far this year, and Ether has appreciated 15%, largely thanks to the approval of ETFs holding both tokens earlier this year.
