According to BlackRock, the world's largest asset manager, there is still a lot of potential room for increased demand for bitcoin (BTC) through exchange-traded funds (ETFs). This was stated yesterday, July 25, during its participation in the Bitcoin 2024 conference that is taking place in Nashville, United States. The arrival of these products to the US market six months ago was among the best ETF launches in history. Among all the bitcoin ETFs, the one managed by BlackRock has quickly positioned itself as the one that manages the most capital. This ETF has almost 20 billion dollars (USD) of accumulated inflows. “It's exciting when you launch something and it meets or even exceeds the very high demand expectations that we had,” said Robert Mitchnick, head of digital assets at BlackRock. However, he indicated that “the interesting thing is that this is very early.” “That's what many people don't realize,” he added. The specialist explained that they have received immense demand from one sector: investors who manage their own portfolios, ranging from low-net-worth to high-net-worth retailers. But, They have not yet seen a large deployment of two other potential purchasing groups: asset advisors and institutions.
“There are some large institutions that have invested in BlackRock’s bitcoin ETF, but so far they are in the minority,” said Robert Mitchnick, a BlackRock executive.
For this group, he indicated that there is a significant effort of education, due diligence and research because bitcoin functions as a new asset class. He also pointed out that, although some trading platforms have admitted bitcoin ETFs, they are still restricted in several, which makes it difficult for a large part of the market to access them. In general, he clarified, it takes years for them to be enabled depending on their development, although this could be brought forward. “Many of the largest platforms are accelerating their efforts to achieve this, but we have not yet had the first major platform that achieves it,” he revealed. According to his sources, this is likely to happen this year, so They do not rule out a new wave of demand to come.
Seen on the left is BlackRock executive Robert Mitchnick, and on the right is his moderator at the conference, Bloomberg ETF strategist James Seyffart. Source: Bitcoin 2024.
“People see bitcoin as a potential safe haven asset”
As for the current capital flow, BlackRock executive highlights that the consistent long-term strategy of investors is quite surprisingThis decreases the volatility of bitcoin's price, which is appreciated by many traders and wealth advisors. In line with this, it highlights that many appreciate that BTC's long-term fluctuation has been going down, which decreases its risk.
“Some people don’t realize that there are a lot of big tech stocks that people have in their portfolios, even with index funds, that are more volatile than bitcoin right now,” said Robert Mitchnick, a BlackRock executive.
He also stresses that Bitcoin is very different from stocks, fixed income or other traditional assets when they think about the fundamental drivers of risk and profitability. “This is a sovereign, scarce and decentralized asset,” he stressed. In this sense, it has a low correlation with the factors that impact other assets. “It is in itself a risky asset independently,” he summarized. “These risks have to do with uncertainty about future adoption, regulation, the development of a still nascent ecosystem,” he specified. This is what makes “people see bitcoin as a possible safe haven asset.” These comments come while, as BitcoinDynamic reported, bitcoin remains trading in a lateral range below its new historical maximum registered four months ago, which was USD 73,700.