Institutional investment in Bitcoin (BTC) has strengthened, but its price has struggled to reflect the growing demand, according to BlackRock’s Global Head of Digital Assets, Robbie Mitchnick.
Despite continued adoption by large financial players, Bitcoin has experienced significant ETF outflows and cautious sentiment in early 2025, which have kept prices below previous highs.
Mitchnick noted that short-term market behavior and macroeconomic uncertainty have slowed momentum despite optimism surrounding regulatory shifts in Washington initially drove gains,
Recession could be catalyst
Speaking with Yahoo Finance on March 18, Mitchnick argued that Bitcoin’s fundamental characteristics — scarcity, decentralization, and independence from traditional monetary systems — position it as a strong hedge against economic downturns.
He further suggested that a US recession could serve as a major catalyst for Bitcoin’s next rally.
According to Mitchnick:
“A recession would be a big catalyst for Bitcoin. It’s long liquidity, meaning it benefits from increased fiscal spending, deficit accumulation, and lower interest rates — all typical features of a recessionary environment.”
Mitchnick highlighted that while gold has surged to record highs amid growing economic uncertainty, Bitcoin has not yet mirrored that trend. He attributed this divergence to Bitcoin’s short-term trading trends, where it is often treated as a risk-on asset rather than a store of value.
Additionally, he explained that recent Bitcoin ETF outflows have been primarily driven by hedge funds unwinding spot-futures arbitrage trades rather than long-term investors exiting the market.
He emphasizing that institutional confidence in Bitcoin remains strong despite short-term volatility, saying:
“The core long-term holders are still in.”
US Bitcoin reserve
Mitchnick also weighed in on President Donald Trump’s move to establish a US Strategic Bitcoin Reserve, calling it a strong signal of support for BTC’s unique status within the digital asset space.
However, he noted that the specifics of how the government plans to acquire and manage Bitcoin remain unclear, which does not help with the current uncertainty prevalent in the market.
Mitchnick also indicated that institutional capital is still flowing into the market. He noted that professional investors appear to be taking advantage of the current dip, with many treating Bitcoin’s price weakness as an accumulation opportunity.
He said:
“Some of the most sophisticated Bitcoin accumulators we speak with are treating this dip as an opportunity.”
Despite ongoing regulatory uncertainties and security concerns in the broader crypto industry, Mitchnick remained optimistic about Bitcoin’s long-term role.
He also argued that investors will increasingly view Bitcoin as a hedge against traditional financial instability, potentially driving renewed momentum in the months ahead amid the uncertain economic landscape.
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