Institutional adoption of Bitcoin continues to grow, but the expected price increases aren’t materializing. A senior BlackRock expert explains why the market hasn’t yet reacted to the latest developments.
Institutional adoption of Bitcoin is progressing, but the expected price increases have not materialized. Robbie Mitchnick, head of digital assets at BlackRock, emphasizes that despite recent declines, the Bitcoin price is still 15% higher than it was in early November. In an interview with Yahoo Finance, he explained that the cryptocurrency’s current value does not reflect the number of significant institutions currently investing in Bitcoin.
Mitchnick believes the market has not yet caught up with reality. He expects Bitcoin’s value to increase significantly once prices align with institutional interest. This assessment is supported by the fact that major financial institutions such as Barclays and JPMorgan own significant amounts of BlackRock’s iShares BTC Trust, which monitors the Bitcoin price.
Interestingly, the recent executive order issued by US President Donald Trump to establish a strategic Bitcoin reserve did not trigger the expected price increase. Instead, the value of the cryptocurrency has declined since the announcement. Mitchnick attributes this to exaggerated expectations regarding the speed with which these developments would impact prices.
BlackRock remains committed to encouraging institutional Bitcoin investment. Despite the volatility of Bitcoin prices, Mitchnick is optimistic that efforts to encourage more financial institutions and asset managers to invest in Bitcoin will bear fruit. He sees the current market situation as an opportunity for Bitcoin to benefit from a recession in the long term.
Mitchnick argues that the perception of Bitcoin as a risky asset is self-inflicted. He believes Bitcoin’s fundamental properties should allow it to move against market risks, similar to gold. In times of economic uncertainty, factors such as increased government spending and low interest rates could benefit Bitcoin.
The long-term outlook for Bitcoin remains positive, especially considering the increasing institutional participation and potential economic benefits. However, market participants must be patient, as the impact of these developments will take time to fully unfold.
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