BlackRock sees Bitcoin’s scarcity and independence as key to combating a recession.

Institutional investment in Bitcoin (BTC) has increased, but its price has yet to reflect growing demand, according to Robbie Mitchnick, BlackRock’s global head of digital assets.

Despite continued adoption by major financial firms, Bitcoin has seen significant ETF outflows and cautious sentiment in early 2025, keeping prices below previous highs.

Mitchnick noted that short-term market behavior and macroeconomic uncertainty have slowed growth, although optimism around regulatory changes in Washington initially fueled the rally.

Recession Could Be a Catalyst
Speaking to Yahoo Finance on March 18, Mitchnick argued that Bitcoin’s fundamental characteristics — scarcity, decentralization, and independence from traditional monetary systems — make it a strong hedge against economic downturns.

He also suggested that a recession in the United States could act as a major catalyst for Bitcoin’s next bull run.

According to Mitchnick:

“A recession is going to be a big catalyst for Bitcoin. It’s long-term liquidity, meaning it benefits from increased fiscal spending, deficit accumulation, and lower interest rates — all of which are typical characteristics of a recessionary environment.”

Mitchnick emphasized that while gold has surged to record highs amid growing economic uncertainty, Bitcoin has yet to reflect that trend. He attributed this discrepancy to Bitcoin’s short-term trading style, where it is often viewed as a risk asset rather than a store of value.

Additionally, he explained that recent outflows from Bitcoin ETFs are largely due to hedge funds unwinding their spot-futures arbitrage trades rather than long-term investors exiting the market.

He emphasized that institutional confidence in Bitcoin remains strong despite the short-term volatility:

“The core long-term holders are still holding.”

US Bitcoin Reserve
Mitchnick also commented on President Donald Trump’s move to establish the US Strategic Bitcoin Reserve, calling it a strong signal in support of BTC’s unique position in the digital asset space.

However, he noted that the specifics of how the government intends to acquire and manage Bitcoin remain unclear, which does not help the current market volatility.

Mitchnick also pointed out that institutional capital is still flowing into the market. He noted that professional investors appear to be taking advantage of the current price decline, with many viewing the weakness in Bitcoin as an accumulation opportunity.

He said:

“Some of the most sophisticated Bitcoin accumulators we talk to are viewing this dip as an opportunity.”

Despite regulatory uncertainty and security concerns in the broader crypto industry, Mitchnick remains bullish on Bitcoin’s long-term role.

He also argued that investors will increasingly view Bitcoin as a hedge against traditional financial turmoil, potentially spurring fresh momentum in the coming months amid economic uncertainty.