Author: cryptoslate

Compiled by: Blockchain Knight

Robbie Mitchnick, BlackRock's Global Head of Digital Assets, stated that while institutional investment in BTC has been increasing, its price has struggled to reflect the growing demand.

Despite the continued adoption of BTC by major financial institutions, BTC faced significant ETF 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 shift in Washington's regulatory policies had boosted BTC, short-term market behavior and macroeconomic uncertainty have tempered 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 recessions.

He further stated that a U.S. 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 new historical 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 it is often viewed as a risk asset rather than a store of value.

Additionally, he explained that the recent BTC ETF 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 the short-term volatility, institutional confidence in BTC remains strong, stating, "The core long-term holders are still holding firm."

U.S. BTC Reserves

Mitchnick also commented on former President Donald Trump's initiative to establish a U.S. 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 on 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 appear to be taking advantage of the current price decline, with many seeing the weakness in BTC price 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 hedge against traditional financial instability, which could drive a BTC price resurgence in the coming months amid the current economic uncertainty.