Today, BlackRock Robert Mitchnick’s digital asset chief in the Bloomberg ETF IQHe talked about what is really promoting the increase in Bitcoin ETFs.
“It is a lot of things that come together. Outside the door was the retail demand and investors …”, said Mitchnick. “Now, more recently, we have seen a constant progress of more adoption of heritage advisors, more institutional adoption. It has been a mixture of people that is the first time they have invested in anything in the cryptographic space. And then, on the other hand, there are many people who have been invested in Bitcoin for a long time and are taking advantage of the ETP wrap.”
When it comes to institutional adoption, Mitchnick says we are still early. ETF’s approvals usually have been, but some companies are accelerating the process.
“We have seen that quickly tracked by several companies, and we talk about fast tracking,” Mitchnick said. “We are talking about, you know, in the quarterfinals, not months. And slowly but surely, I think it has seen an acceleration, particularly in the last months of more notable companies that reduce barriers, giving approval to their advisors to use them.”
Bitcoin’s volatility has decreased recently, so it is more attractive to institutions that seek diversification. However, it is still volatile, but its risk and return profile differs from traditional assets.
“There is no doubt that it is a relatively novel technology,” Mitchnick said. “Although volatility has decreased, it is still volatile, but at the same time its risk and return conductors are remarkably different from most of the rest of the assets in a traditional portfolio, and that is important. Therefore, when institutions are looking at this, they are strongly focused on that correlation and if it is zero or even in some negative periods, then the case of the construction of portfolio is very general,”.
Around a dozen Bitcoin ETF currently compete in the market, and demand is still strong.
“Well, many of them have been, you know, also very successful,” Mitchnick said. “Obviously, he has been the leader in the category for a fair margin. But there has been so much demand that, you know, it has been exciting and there are many products in space and that is something good.”
