NEW YORK — While BlackRock’s iShares Bitcoin ETF (IBIT) is among the most successful product launches in Wall Street history, the crypto market’s growing reliance on leverage could harm bitcoin in the long term. institutional appeal, according to Robert Mitchnick, head of digital assets at BlackRock.
In a conversation with Anthony Pompliano and investor Dan Tapiero at the Bitcoin Investor Week conference in New York on Thursday, Mitchnick said that while Bitcoin’s fundamentals remain strong, excessive speculation — particularly on leveraged derivatives platforms — introduces instability that threatens the asset’s positioning as a serious portfolio hedge.
“In this day and age, where there’s one tiny thing that shouldn’t really have an impact on pricing – and if it does, it should be minimal – like, for example, October 10, something related to tariffs, and the next thing you know, [bitcoin] is down 20%,” Mitchnick said. “That’s because you get cascading liquidations and automatic deleveraging.”
While bitcoin’s long-term value proposition as a “global, scarce, decentralized monetary asset” remains intact, Mitchnick warned that the asset’s short-term trading behavior is starting to dangerously resemble that of the “leveraged NASDAQ” — a perception that could deter conservative allocators from entering the space.
“The facts lean more in favor of how I characterized it,” he said, referring to Bitcoin’s fundamental attributes. “But now the trading data, at least lately, looks a lot different, and the bar for adoption if it trades like the leveraged NASDAQ is much, much, much higher.”
Mitchnick also pushed back on the idea that exchange-traded funds (ETFs) like IBIT contribute to volatility, instead pointing to perpetual futures platforms as a source of instability.
“There’s a misconception that it’s a bunch of hedge funds in ETFs that are creating volatility and selling; that’s not what we’re seeing,” he said. “In what was a tumultuous week, obviously, in the Bitcoin market, we bought back 0.2% of the fund. If there had actually been hedge funds massively unwinding trades… you would have seen billions. We saw several billions liquidated on these leveraged platforms.”
Despite the near-term turmoil, Mitchnick emphasized that BlackRock remains committed to digital assets as part of a broader financial transformation.
“We see ourselves as having a role as a bridge… between traditional finance and the world of digital assets,” he said. “As time goes on, digital assets and this technology theme in general will certainly continue to play a larger role for many of our clients.”
Read more: Bitcoin Could Reflexly Move Into a Low-Beta Stock Play, Says BlackRock’s Mitchnik
