The financial giant is worried. While BlackRock's financial products based on Bitcoin are among the most successful in Wall Street historyBlackRock's head of digital assets Robert Mitchnick has expressed concerns about the growing use of leverage in cryptocurrency trading. According to him, this dependence could harm the institutional appeal of Bitcoin.
The key points of this article:BlackRock has expressed concerns about growing leverage in cryptocurrency trading, putting Bitcoin's institutional appeal at risk.
Robert Mitchnick has claimed that perpetual futures platforms, not ETFs, are responsible for Bitcoin's volatility.
Increased volatility on Bitcoin due to excessive speculation
At the Bitcoin Investor Week conference in New York, Robert Mitchnick emphasized that the excessive speculationparticularly on leveraged derivatives platforms, introduces a instability which threatens the position of bitcoin as blanket serious portfolio:
“Those days when you have one small thing that shouldn't have an impact on the price, like October 10 with the tariffs, and Bitcoin falling 20%, it's because of the cascading liquidations and automatic deleveraging. »
Robert Mitchnick, Head of Digital Assets at BlackRock – Source: Coindesk
He compared the behavior current price of Bitcoin at a Leveraged NASDAQwhich could deter conservative investors to enter the market.
For this BlackRock executive, volatility in the Bitcoin market could be a problem in the future
ETFs are not responsible for volatility
Contrary to some preconceived ideas, Robert Mitchnick declared that the ETF like BlackRock's IBIT are not responsible for volatility. Instead, he pointed to the platforms futures contracts perpetual as a source of instability:
“There is a misperception that it is the hedge funds in ETFs that create volatility. That's not what we see. »
Robert Mitchnick, Head of Digital Assets at BlackRock – Source: Coindesk
Despite these turbulence in the short term, he finally reaffirmed that BlackRock remains committed to digital assetsseeing its role as a bridge between traditional finance and the world of digital assets:
“Over time, there will certainly be an increasing role for digital assets and this technology for many of our clients. »
Robert Mitchnick, Head of Digital Assets at BlackRock – Source: Coindesk
As BlackRock continues to play a major role in financial transformation, this official's concerns highlight the challenges Bitcoin faces as it attempts to establish itself as a stable institutional asset. Excessive speculation and the use ofleverage could well be major obstacles on this path.