Robbie Mitchnick, BlackRock’s Head of Digital Assets, recently positioned Bitcoin as a scarce, decentralized, non-sovereign asset emerging as a viable global monetary alternative.
This came in a Tuesday interview on Bloomberg, in which Mitchnick emphasized Bitcoin’s unique characteristics that differentiate it from traditional financial assets.
Reassessing Bitcoin’s Risk Profile
During the interview, Mitchnick addressed the common misconception of Bitcoin as a “risk-on” asset. He argued that this classification has distorted investor perceptions, particularly among those influenced by narratives highlighting Bitcoin’s volatility.
According to Mitchnick, the long-term drivers of Bitcoin’s value are fundamentally different from those affecting traditional equities. This mischaracterization has led to confusion regarding Bitcoin’s actual risk profile.
Mitchnick explained that the crypto industry has inadvertently reinforced this misunderstanding by treating Bitcoin as if it should behave like equities. He suggested that, given its decentralized and non-sovereign nature, Bitcoin should actually be viewed as a “risk-off” asset.
He also noted that Bitcoin’s value is seldom impacted by external factors, with only a few significant events each year affecting its fundamentals.
BlackRock’s Operational Adjustments
Recently, BlackRock amended its Bitcoin ETF with a requirement for withdrawals within 12 hours from Coinbase, its custodian. Mitchnick played down the significance of this change, describing it as part of routine operational adjustments.
He stated that these updates reflect ongoing refinements in managing crypto ETFs and do not represent any major shift in BlackRock’s approach.
BlackRock’s handling of the ETF has drawn scrutiny, especially after allegations surfaced about potential influence over Coinbase’s on-chain Bitcoin holdings. Mitchnick dismissed these concerns, emphasizing that the adjustments are standard practices intended to optimize the operational models behind the ETF.
Insights from Bloomberg Analyst
In response to recent developments, Bloomberg’s analyst Eric Balchunas provided insights into BlackRock’s approach to on-chain verification. He explained that BlackRock operates its own node to verify Bitcoin balances. This verification process ensures that the Bitcoin holdings of its IBIT ETF are accurately represented.
Balchunas clarified that, while BlackRock provides this verification data to institutional clients upon request, it does not make it publicly available. This decision aims to manage the high volume of spam inquiries the firm receives.
He highlighted that BlackRock’s verification strategy underscores its commitment to transparency, mitigating concerns about “paper BTC” and ensuring integrity in its operations.
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