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Bitcoin’s classification in the financial ecosystem is highly debatable. Some analysts see it as a stable haven and others as a risky asset. However, Robbie Mitchnick, the head of digital assets at BlackRock Inc., argues that Bitcoin is fundamentally a risk-off asset. BlackRock Executive Talks About Fundamentals of Bitcoin Risk-off assets like gold and government bonds are favored in uncertain times, providing a safe harbor when the economic forecast looks grim. In contrast, risk-on assets, such as stocks, thrive when investor confidence is high. Despite occasional correlations with the stock market, Mitchnick asserts that Bitcoin ultimately behaves differently in the long run. “There’s been periods where Bitcoin’s correlation with equities has spiked and there’ve been periods where it’s gone negative. Actually gold shows a lot of the same patterns where you have these temporary periods where it spikes, but long term, close to zero,” Mitchnick said. Read more: How To Trade a Bitcoin ETF: A Step-by-Step Approach Mitchnick further explores Bitcoin’s unique attributes as a global, decentralized, non-sovereign asset. He believes that Bitcoin is not tied to any single country’s economic health or policies. It’s a scarce asset, immune to the usual risks of currency debasement and political turmoil. According to Mitchnick, due to these reasons, Bitcoin becomes an attractive option when traditional currencies falter. BlackRock’s engagement with Bitcoin highlights its risk-off potential. The firm’s iShares Bitcoin Trust (IBIT) now holds nearly $23 billion in assets. This significant management suggests a strong institutional and retail belief in Bitcoin’s stability in tumultuous times. Bitcoin Assets Under Management. Source: SoSoValue This shifting perspective is evident beyond BlackRock. At the recent Barron’s Advisor 100 Summit, a clear change was noted among top financial advisors in the US. Read more: Who Owns the Most Bitcoin in 2024? Matt Hougan, Chief Investment Officer at Bitwise,…

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Filed under: News - @ September 25, 2024 8:28 pm