BlackRock Executive: Bitcoin's Price Does Not Reflect Its Strong Institutional Demand

Article by: cryptoslate

Translation by: Blockchain Knight

Robbie Mitchnick, Global Head of Digital Assets at BlackRock, said that despite increasing institutional investment in BTC, its price has struggled to reflect the growing demand.

Although major financial institutions continue to embrace BTC, early 2025 saw significant outflows from BTC ETFs and cautious market sentiment, leaving prices below previous highs.

Mitchnick noted that while initial optimism driven by shifting regulatory policies in Washington had propelled BTC higher, short-term market behavior and macroeconomic uncertainty have slowed this momentum.

Economic Recession Could Be a Catalyst

On March 18, in an interview with Yahoo Finance, Mitchnick stated that BTC's fundamental characteristics—scarcity, decentralization, and independence from traditional monetary systems—make it a powerful hedge against economic recession.

He further indicated that a U.S. economic recession could become the primary catalyst for BTC’s next price surge.

"A recession would be a major catalyst for BTC," Mitchnick said. "BTC has long-duration liquidity, meaning it benefits from increased fiscal spending, rising deficits, and low interest rates—all typical features of a recessionary environment."

Mitchnick emphasized that while gold surged to record highs amid heightened economic uncertainty, BTC has not yet exhibited a similar trend. He attributed this difference to BTC’s short-term trading dynamics, where it is often perceived as a risk asset rather than a store of value.

Moreover, he explained that recent outflows from BTC ETFs were primarily due to hedge funds unwinding 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, stating, "The core long-term holders are still holding firm."

A U.S. BTC Reserve

Mitchnick also commented on former President Donald Trump’s proposal to establish a strategic BTC reserve for the United States, calling it a strong endorsement of BTC’s unique position within the digital asset landscape.

However, he pointed out that specific details regarding how the government would acquire and manage BTC remain unclear, which does little to alleviate the widespread uncertainty currently present in the market.

Mitchnick also noted that institutional capital continues to enter the market. He observed that sophisticated investors appear to be taking advantage of the current price dip, with many viewing BTC’s weakness as an accumulation opportunity.

"Some of the most seasoned BTC accumulators we've spoken to are seeing this downturn as an opportunity," he said.

Despite ongoing regulatory uncertainties and security concerns within the crypto industry, Mitchnick remains optimistic about BTC’s long-term outlook.

He also believes investors will increasingly view BTC as a hedge against instability in traditional finance, which could potentially drive BTC prices upward again in the coming months amid uncertain economic conditions.