- BlackRock’s head of digital assets believes bitcoin is more like digital gold than a risky asset.
- Robert Mitchneck stated that the first cryptocurrency can be a portfolio diversifier.
Bitcoin is more like digital gold than a so-called risky asset. This was stated by Robert Mitchnick, head of digital assets at BlackRock (Robert Mitchnick) at the Bitcoin Investor Day conference in New York.
He also talked about the first cryptocurrency’s correlation with stocks:
“Historically, bitcoin’s average long-term correlation [with stocks] has been close to zero. It’s had periods where it’s taken off like gold. If you present graphs of their correlation, they look remarkably similar.”
Mitchneck noted that bitcoin has one fundamental macroeconomic variable on which it is highly correlated with stocks. He said it is that “the asset has very short real interest rates and long inflation expectations.”
A BlackRock spokesperson believes “correlation is probably the most important debate in the bitcoin discourse.”
“It is important for any investor to realize that this is the reason bitcoin is generally not suitable for a large concentration in a portfolio, as its volatility becomes a huge risk factor. With a more modest concentration, the asset potentially becomes another source of return and even in some cases a diversifier,” Mitchneck said.
Recall, earlier BlackRock filed an application with the U.S. Securities and Exchange Commission for registration of a new investment fund.
