Blackrock Pushes Bitcoin Into Spotlight: Could Be Too Risky Not to Own Any in Today's Market

In a statement sure to interest the crypto sphere, the world’s largest asset manager, Blackrock, asserted that institutional interest in bitcoin could quickly escalate if the cryptocurrency demonstrates the ability to operate autonomously from risk-on equities.

Speaking at the Token2049 crypto conference in the metaverse, Robbie Mitchnick, head of digital assets at Blackrock, highlighted the crucial role of bitcoin’s correlation to tech stocks in its broader institutional appeal.

“The correlation between bitcoin and tech stocks is going to be an absolutely critical driver. If bitcoin trades more like a tech stock, it is not very interesting to institutions,” Mitchnick told DL News.

He explained that bitcoin’s inclusion in portfolio compositions largely depends on its performance during market declines. If the asset exhibits lower or even inverse correlation to what Mitchnick termed “left tail” events—severe and less frequent negative market occurrences—it could gain significant appeal as a hedging instrument.

“If you see bitcoin trading with low or even negative correlation to left tail events, then it becomes potentially a very important portfolio asset to all manner of institutional portfolios,” Mitchnick said.

In his concluding observation, Mitchnick suggested that bitcoin could transition from a speculative bet to a strategic necessity in the eyes of large investors.

“The conversation goes from, ‘Is this too risky for us?’ to ‘Might it be risky not to own any?'” he said.

These comments follow BTC’s ongoing decoupling from equities, with some arguing that the asset is evolving into a more stable, low-volatility store of value. While critics highlight remaining volatility and regulatory uncertainty, digital asset proponents see BTC’s shifting market dynamics as evidence of its long-term institutional significance.

Blackrock has made a strong entrance into the crypto market, fueled by a shift from its CEO, Larry Fink. Under his leadership, the firm launched the Ishares Bitcoin Trust (IBIT) in January 2024, which has become the fastest-growing ETF.

Previously known for skepticism towards cryptocurrencies, Fink has now embraced BTC as “digital gold” and sees it as a crucial asset for portfolios seeking protection from currency devaluation and global political concerns. His bullish prediction earlier this year—that bitcoin could soar to $700,000 if sovereign wealth funds allocate just 2%-5% of their assets to it—highlights a substantial shift in Wall Street’s approach to crypto.