BITCOIN, A RISK-OFF ASSET?
As the price of Bitcoin recently dropped by more than 20% from its all-time high of $108,000, BlackRock's head of digital assets, Robert Mitchnick, stated in an interview that Bitcoin is not a risk asset. According to him, this crypto is "global, rare, non-sovereign, and decentralized".
A risk asset is an investment that poses a potential financial loss for investors. In the case of Bitcoin, Robert Mitchnick believes that the idea of it being a so-called risk-on asset is a "self-inflicted wound" by the industry itself:
"What we have seen lately seems to be a self-inflicted wound from some research and comments in the industry, which sometimes lean towards this idea of a risky asset," he said in the U.S. trade press.
He emphasized that economic fears in the United States, such as rising tariffs and the possibility of a recession, should not affect the price of Bitcoin.
"It is not clear that tariffs are fundamentally bad for Bitcoin," he added. "As for economic fears, I don’t know if we have a recession or not, but it would be a great catalyst for Bitcoin".
The rush for institutional dollars propelled Bitcoin to a record price of over $108,000 by the end of 2024. However, the price of the asset has since dropped by more than 20% as investors grapple with the effects of President Trump's aggressive tariff policies and the possibility of a recession in the United States.
Despite this, Robert Mitchnick remains optimistic about the future of Bitcoin: "Obviously, 2024 has been quite incredible, quite historic," he said. But "fundamentally, we believe this is what the long term will be. That’s why people perceive it as digital gold".
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