BlackRock’s head of digital assets, Robbie Mitchnick, has disputed the notion that Bitcoin is a “risk-on” asset. In an interview with Bloomberg, Mitchnick stated that the crypto industry has misinterpreted Bitcoin’s risk profile. He argued that while Bitcoin is undoubtedly a risky asset, it should not be considered a risk-on asset that trades like equities. Mitchnick highlighted the fundamental differences between Bitcoin and equities, suggesting that the drivers of Bitcoin are distinct and, in some cases, even inverted compared to equities.
In BlackRock’s recently released Bitcoin white paper, the asset manager described Bitcoin as a “unique diversifier” that can serve as a hedge against monetary and geopolitical risks. Mitchnick emphasized that Bitcoin is an emerging global money alternative, characterized by scarcity, decentralization, and lack of country-specific or traditional counterparty risks.
The term “risk-on” typically applies to assets that perform well in favorable economic conditions, such as tech stocks, growth stocks, commodities, and many cryptocurrencies. Conversely, “risk-off” assets thrive during periods of market uncertainty or economic downturns, including gold, silver, government bonds, and the US dollar.
Mitchnick pointed out that only a few events each year significantly impact Bitcoin’s fundamental value. Despite this, Bitcoin has outperformed the S&P 500 during major geopolitical events, further challenging the perception of it as a risk-on asset.
Regarding BlackRock’s Bitcoin exchange-traded fund (ETF), called iShares Bitcoin Trust (IBIT), Mitchnick downplayed concerns about a recent amendment that requires withdrawals within 12 hours from Coinbase, the ETF’s custodian. He stated that this amendment is part of the normal course of refining and optimizing operational models for crypto ETFs.
In a separate development, PlanB, a crypto analyst known for the controversial Bitcoin stock-to-flow (S2F) model, has proposed a scenario in which Bitcoin reaches a price of $1 million by the end of 2025. The scenario involves a Trump victory in the November election, ending the “war on crypto” and pushing Bitcoin to a new all-time high of $100,000. According to PlanB’s theory, by January 2025, crypto companies would return to the United States, driving Bitcoin to $200,000. Additionally, Trump would start building a strategic Bitcoin reserve in April, causing the price to soar to $400,000. Finally, “face-melting FOMO” between July and December would propel Bitcoin to $1 million.
While some commenters found this scenario overly optimistic, it has sparked discussion within the crypto community.