BlackRock's Head of Digital Assets, Robert Mitchnick, recently stated that the reason Bit is labeled as a "high-risk asset" is largely due to the narrative of the cryptocurrency industry itself. He believes that the core characteristics of Bit do not fit the definition of a traditional risk asset, and the market's perception of its risk is misunderstood.

The cryptocurrency industry's narrative distorts the image of Bit

In an interview with CNBC's "Squawk Box", Mitchnick pointed out that the cryptocurrency industry has long portrayed Bit as a "risk-on asset", ignoring its core characteristics of "globality, scarcity, and decentralization", and this long-standing misrepresentation has affected the market's assessment of Bit:

What we are seeing is largely a self-fulfilling effect caused by the research and commentary of the crypto industry itself, which could even be described as a self-inflicted predicament, as they constantly emphasize the attributes of Bit related to risk assets, rather than its fundamental characteristics.

In the traditional financial market, risk assets usually refer to investments like stocks that may incur losses. However, Mitchnick believes that this definition should not apply to Bit, as its nature is different from general risk assets.

(Crypto market crash in the trade war: Bit ultimately cannot escape the fate of a risk asset)

Bit ETF drives the institutional investment wave

Since the U.S. SEC approved the Bit spot ETF in early 2024, institutional investors' interest in Bit has risen significantly. BlackRock's iShares Bit Trust (IBIT) has become the market leader, with its assets under management reaching $48.7 billion, accounting for more than half of the entire Bit spot ETF market.

IBIT has also set the record for the fastest ETF in the industry to reach $10 billion in assets in 32 years. The influx of institutional capital is widely seen as the main driver behind Bit's record high of $108,000 at the end of 2024.

However, due to increased uncertainty in the U.S. economy and concerns about President Trump's trade tariff policies, Bit prices have recently corrected by more than 20%. During this downward trend, Bit spot ETFs have also seen consecutive outflows of nearly $5.4 billion for five weeks, only recently seeing inflows again.

(Bit ETFs see $274 million inflow in a single day! Fidelity FBTC attracts $127 million, the brightest spot, as institutional money gradually returns)

Economic recession may not necessarily be detrimental to Bit

Regarding the recent market views that an economic recession will impact Bit, Mitchnick expressed dissent. He believes that as an asset independent of the sovereign currency system, Bit's performance is not closely linked to economic cycles:

Will an economic recession affect Bit prices? This claim is completely unreasonable. In fact, an economic recession may become a catalyst for driving Bit demand.

He pointed out that while rising U.S. interest rates may put pressure on Bit, other assets like stocks will also face similar challenges. Therefore, Bit's volatility should not be simply attributed to macroeconomic factors.

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2024 is historic, Bit remains the digital gold

Even with the recent price pullback, Mitchnick still emphasizes that Bit's gains since last November are still up 15%, and the long-term trend remains positive:

2024 was a very historic year for Bit, which is why people see Bit as digital gold.

However, the well-known gold bull and Bit critic Peter Schiff recently warned on X:

The Bit bubble has burst, and real gold is the future. Digital Fool's Gold will gradually be eliminated by the market, and those who ignore this trend will suffer the consequences.

(Gold market value hits a new high of $20 trillion, is the U.S. debt and "safe haven" drifting further apart?)

Robert Mitchnick is trying to break the market's misconception of "Bit as a risk asset", believing that this view is mainly due to the misleading narrative within the industry, and that Bit should be seen as a unique value storage tool.

As institutional funds continue to pour in, the role of Bit as the "digital gold" will be further consolidated, and the market's perception of its risk attributes may need to be re-evaluated. Risk warning Cryptocurrency investment is highly risky, and its price may fluctuate violently, and you may lose all your principal. Please carefully evaluate the risks.