BlackRock head of digital assets Robbie Mitchnick believes the crypto industry has made a marketing blunder when it comes to Bitcoin (BTC).
Mitchnick said during an interview with Bloomberg that Bitcoin is a risky asset, but calling it a “risk-on” asset is a mistake akin to an “own goal.”
A risk-on asset, like stocks, is something that investors buy when they are optimistic about the market and are willing to take more risk. Therefore, a “risk-off asset” is where investors move their money when they’re worried about market volatility. Gold, for example, is considered a risk-off asset because it is likely to hold or increase in value despite economic downturns.
Mitchnick said:
“Some of the crypto research type publications and daily commentaries have taken the fact that Bitcoin, which is obviously a risky asset, and extrapolated that to say that therefore it is a risk-on asset and should trade like equities.”
He further explained that Bitcoin acts in a fundamentally different way than equities and other risk-on assets. Mitchnick added that the long-term drivers of Bitcoin are “very different” from other risk-on assets and in some cases, may even be “inverted.”
Additionally, Bitcoin does not carry the risks that are usually associated with other risk-on assets. Mitchnick said:
“When we think about Bitcoin, we think about it primarily as an emerging global monetary alternative—[a] scarce, global, decentralized, non-sovereign asset. And it’s an asset that ha
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Author: Monika Ghosh
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