BlackRock Digital Asset Head: Leverage-driven volatility is threatening the Bitcoin narrative

BTC-0.66%

PANews February 15 News, according to CoinDesk, BlackRock’s Head of Digital Assets Robert Mitchnick stated at the Bitcoin Investor Week conference that the proliferation of leverage speculation on crypto derivatives platforms is intensifying market volatility and may harm Bitcoin’s long-term positioning as a stable institutional hedge. Mitchnick pointed out that Bitcoin’s fundamentals as a “global, scarce, decentralized monetary asset” remain solid, but its short-term trading behavior is increasingly exhibiting characteristics of a “leverage-driven Nasdaq,” which will significantly raise the threshold for conservative institutional investors to allocate to this asset.
Mitchnick also countered the view that spot ETFs are exacerbating market volatility. He said that during a turbulent week, BlackRock’s IBIT fund only experienced a 0.2% redemption, and if hedge funds had large-scale liquidations, there should have been tens of billions of dollars in outflows, but in reality, tens of billions of dollars in liquidations occurred on leverage platforms.

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