
According to The Block, BlackRock’s head of digital assets, Robert Mitchnick, stated that funds have started to flow back into Bitcoin ETFs, with the investor composition shifting from retail to institutional investors.
Mitchnick mentioned at the Token2049 event in Dubai that investment capital in Bitcoin ETFs is “massively rebounding.” He also noted that in the early stages of ETF launches, the funding primarily came from retail investors, including high-net-worth individuals holding over $100 million. However, the proportion held by these groups has been declining quarterly, while the share held by institutions and wealth advisory clients has been increasing. He explained that the time horizon adopted by institutional clients is longer and cannot be completed overnight.
When Bloomberg senior ETF analyst Eric Balchunas suggested that Bitcoin has shifted from short-term speculators to steadfast holders, Mitchnick acknowledged this as a valid point but emphasized that it is not the whole picture. He believes that considering Bitcoin as a leveraged beta version of U.S. tech stocks is fundamentally nonsensical. However, he indicated that if a certain narrative is repeated enough times, it could become perceived as reality.
Mitchnick remarked that investors seeking such high-volatility assets do not necessarily need to allocate Bitcoin in their portfolios. However, if Bitcoin behaves like a safe-haven asset or a hedge against specific national currency risks, they might consider including Bitcoin in their investment mix. He observed that there was a period when the market was concerned that Bitcoin was merely being treated as a leveraged beta asset, but subsequently, capital began to flow back in at a scale rarely seen since the ETF launch.
When asked about his views on altcoin ETFs, Mitchnick stated that altcoins have distinct differences in their investment properties. He believes that Bitcoin serves as a potential hedge or portfolio diversification tool, which does not apply to other cryptocurrencies.
Regarding whether the new SEC commissioner Paul Atkins will relax regulations to allow more ETFs to launch, including mechanisms like “physical redemption,” Mitchnick expressed caution, stating, “Those who think anything will go through will be disappointed.” He believes that a new regulatory framework is on the horizon, which may make certain processes more challenging than before.
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