Bitcoin's recent rally toward $80,000 has reinforced its case as a portfolio diversifier rather than simply another risk asset, according to BlackRock Head of Digital Assets Robbie Mitchnick.
Speaking to CNBC on Wednesday, Mitchnick said bitcoin has characteristics that can make it behave like a risk-on asset, including its novelty and volatility, while speculative and leveraged trading can reinforce that relationship. However, he argued that bitcoin's fundamental risk and return drivers can point in the opposite direction to equities and other traditional assets.
"Certainly in the last couple of weeks, the [risk-off] narrative has risen back to the forefront," he said. "I think in the long run, that's the narrative to bet on around bitcoin." Mitchnick added that this is how most long-term institutional investors BlackRock engages with view the asset.
That fits with BlackRock's broader view of bitcoin as a portfolio diversifier. Mitchnick described it as a "global scarce decentralized emerging monetary alternative," pointing to the recent pressure on equities and choppy fixed income markets while bitcoin and gold rallied as consistent with that thesis.
BlackRock IBIT is the largest spot bitcoin exchange-traded fund, with over $76 billion in assets under management, according to The Block's data dashboard.
