Bitcoin Mislabelled as Risk-On Asset

Robbie Mitchnick, head of digital assets at BlackRock, has refuted claims that Bitcoin should be considered a 'risk-on' asset. In a recent interview with Bloomberg on September 24, Mitchnick stated, 'What's happened a little bit in the crypto industry is a bit of an own goal.'

Mitchnick elaborated that certain crypto research publications and daily commentaries have mistakenly categorized Bitcoin as a risk-on asset. He explained, 'Some of the crypto research type publications and daily commentaries have taken the fact that Bitcoin, which is a risky asset, and extrapolated it to say it is a risk-on asset and should trade like equities.'

Unique Diversifier

BlackRock's recently released Bitcoin white paper offers a different perspective. The asset manager labeled Bitcoin a 'unique diversifier,' highlighting its potential to hedge against monetary and geopolitical risks. Mitchnick emphasized, 'When we think about Bitcoin, we believe it primarily as an emerging global money alternative right.

It is a scarce, global, decentralized, non-sovereign asset with no country-specific or traditional counterparty risk.

Mitchnick believes that labeling Bitcoin as a 'risk-on' asset is misleading. He said, 'It confuses investors when people talk about it as risk-on because, based on the properties I just described, you would think of it as risk-off.'

Risk-on assets, such as equities and certain commodities, generally perform well during favorable economic conditions. Conversely, risk-off assets, like gold and government bonds, perform well during market uncertainty or economic downturns.

BlackRock's Bitcoin ETF

BlackRock offers a spot Bitcoin exchange-traded fund (ETF) called iShares Bitcoin Trust (IBIT). This ETF allows investors to invest directly in Bitcoin through a regulated investment vehicle.

Mitchnick addressed a recent amendment to the ETF that requires withdrawals within 12 hours from Coinbase's custodian. 'Frankly, nothing of significance has changed here,' said Mitchnick. 'What we do constantly with Coinbase, just like all our other service providers, is an operational fine-tuning and optimization of models as you get into these crypto ETFs. So this is just a normal course update as we refine things.'

PlanB's Bitcoin Prediction

Amid the ongoing discussions about Bitcoin, PlanB, a crypto analyst and creator of the controversial Bitcoin stock-to-flow (S2F) model, has proposed a new dream scenario.

In a September 24 post on X, PlanB predicted that Bitcoin could hit an all-time high above $1 million by the end of 2025. The scenario involves Trump winning the election in November, ending the 'war on crypto,' and pushing Bitcoin to a new all-time high of $100,000.

PlanB's theory continues, with Bitcoin prices skyrocketing to $200,000 by January 2025 as crypto companies return to the United States. By April, Trump would begin building a strategic Bitcoin reserve, causing the currency to hit $400,000.

Finally, 'face-melting FOMO' would drive Bitcoin to $1 million between July and December. However, many commenters have expressed skepticism about this optimistic prediction. One crypto trader, Mr. Moontastic, humorously remarked, 'If all of this will be true, I will run naked in the streets.'