Author: cryptoslate; Compiled by: Blockchain Knight
Robbie Mitchnick, BlackRock's Global Head of Digital Assets, said that although institutional investment in BTC has been increasing, its price has not reflected the growing demand.
Despite the continued adoption of BTC by major financial institutions, BTC faced significant ETF fund outflows and market caution in early 2025, leading to prices below previous highs.
Mitchnick pointed out that while the optimistic sentiment initially driven by the policy shift in Washington had boosted BTC, short-term market behavior and macroeconomic uncertainty have dampened this momentum.
Recession as a Catalyst
On March 18, Mitchnick told Yahoo Finance that BTC's inherent characteristics of scarcity, decentralization, and independence from the traditional monetary system make it a powerful hedge against economic recession.
He further stated that a US economic recession could be the primary catalyst for the next BTC rally.
Mitchnick said: "A recession will be a major catalyst for BTC. BTC has long-term liquidity, meaning it can benefit from increased fiscal spending, accumulating deficits, and low interest rates, which are typical features of a recessionary environment."
Mitchnick emphasized that while gold has surged to historic highs amid heightened economic uncertainty, BTC has not yet exhibited a similar trend. He attributed this difference to BTC's short-term trading behavior, as BTC is often viewed as a risk asset rather than a store of value.
Furthermore, he explained that the recent BTC ETF fund outflows were primarily due to hedge funds unwinding their spot-futures arbitrage trades, rather than long-term investors exiting the market.
He stressed that despite short-term volatility, institutional confidence in BTC remains strong, and stated: "The core long-term holders are still holding firm."
US BTC Reserves
Mitchnick also commented on former President Donald Trump's initiative to establish a US strategic BTC reserve, stating that this move strongly signaled support for BTC's unique position in the digital asset space.
However, he noted that the specific details of how the government plans to acquire and manage BTC are still unclear, which does not help alleviate the widespread uncertainty currently present in the market.
Mitchnick also pointed out that institutional capital continues to flow into the market. He observed that professional investors seem to be taking advantage of the current price decline, with many viewing the weakness in BTC prices as an opportunity to accumulate positions.
He said: "Some of the most seasoned BTC accumulators we've spoken to are viewing this pullback as an opportunity."
Despite the regulatory uncertainty and security concerns still present in the Crypto industry, Mitchnick remains optimistic about BTC's long-term position.
He also believes that investors will increasingly view BTC as a tool to hedge against traditional financial instability, which could drive a resurgence in BTC prices in the coming months amid the current economic uncertainty.
