BlackRock Head of Digital Assets: Leveraged Volatility is Threatening the Bitcoin Narrative

PANews reported on February 15th, citing CoinDesk, that Robert Mitchnick, Head of Digital Assets at BlackRock, stated at the Bitcoin Investors Week conference that rampant leveraged speculation on crypto derivatives platforms is exacerbating market volatility and could damage Bitcoin's long-term position as a stable institutional hedging tool. Mitchnick pointed out that while Bitcoin's fundamentals as a "global, scarce, decentralized monetary asset" remain solid, its short-term trading behavior is increasingly exhibiting characteristics of a "leveraged Nasdaq," a perception that will significantly raise the barrier for conservative institutional investors to allocate to this asset.

Mitchnick also refuted the argument that spot ETFs exacerbate market volatility. He stated that during the turbulent week, BlackRock's IBIT fund experienced only 0.2% redemptions. He argued that a large-scale liquidation by hedge funds should have resulted in billions of dollars in outflows, but the actual liquidation of billions of dollars occurred on leveraged platforms.