In a recent interview with Yahoo Finance, Robbie Mitchnick, Global Head of Digital Assets at BlackRock, provided a comprehensive analysis of Bitcoin’s recent stagnation and outlined his perspective on the underlying institutional demand that may not presently align with the crypto’s price movements. As Bitcoin hovers around the mid-$80,000 range in the early months of 2025, many investors are left wondering what catalysts could potentially reignite the price rally.
Is Bitcoin Undervalued?
Mitchnick pointed out that Bitcoin was showing signs of considerable strength towards the end of 2024, noting that it had appreciated approximately 15% since the beginning of November. He attributed this rally to a blend of institutional interest and optimism surrounding prospective government endorsement from the Trump administration.
However, he warned against what he termed “accelerated, perhaps premature expectations” regarding how quickly these catalysts would manifest. Many investors had anticipated an immediate price surge following the White House’s pro-crypto initiatives, and when the anticipated gains failed to materialize, it led to short-term participants unwinding their positions, exerting downward pressure on Bitcoin’s price.
BlackRock has been at the forefront of institutional exposure to Bitcoin through its exchange-traded funds, yet Mitchnick revealed a moderate decline in inflows: “2024 was pretty incredible, pretty historic on that front,” he stated. “However, the start of 2025 has seen more negative trends, with some modest outflows, given the context of our significant asset base nearing $100 billion.”
This downturn, according to Mitchnick, has primarily been driven by hedge funds unwinding their spot-futures arbitrage trades, which had previously yielded double-digit returns in 2024 but have since diminished. He emphasized that these outflows were primarily from short-term traders rather than the more traditional “buy-and-hold” investor demographic.
A pivotal question raised in the interview was why Bitcoin had not emulated gold as a safe haven during ongoing economic uncertainty. While gold prices have surged amidst investor anxiety, Bitcoin has not followed suit. Mitchnick suggested this disconnect is due to market psychology and “short-term correlation spikes.”
“Bitcoin fundamentally should be uncorrelated or even inversely correlated against certain risk factors on a long-term basis,” he posited. “Yet currently, it has been overly extrapolated to unrelated factors such as tariffs and economic fears, which do not accurately capture Bitcoin’s core value.”
He proceeded to highlight Bitcoin’s inherent qualities—scarcity, decentralization, and independence from any single country’s economic and political system—as reasons to consider it akin to “digital gold.” Nonetheless, he acknowledged that in the short term, investor sentiment often perceives it as a high-volatility “risk-on” asset.
In discussing the U.S. government’s stance, particularly regarding a strategic Bitcoin reserve authorized by the Trump administration, Mitchnick indicated that much remains uncertain. He stressed that “clear signals of support and conviction within this industry, particularly for Bitcoin, are emerging,” though its funding timeline and sources are still under deliberation. Importantly, he noted that this is not the sole catalyst for adoption expected in 2025.
Speculation about whether the government may eventually start accumulating Bitcoin continues to grow, yet Mitchnick underlined the fact that the broader institutional and wealth advisory communities are persistently accumulating positions. These investors remain optimistic about the current market climate, despite recent downturns.
Mitchnick also addressed recent challenges, including the ByBit hack, which tempered market sentiment temporarily. He believes this heightened volatility may drive out short-term traders, but for more seasoned investors, price corrections often present buying opportunities. Notably, he remarked that many had gracefully exited trades at around the $100,000 mark and are now perceiving the current pullback as an irrational selloff—an observation he is keen to support with quantitative analysis.
As of the latest update, Bitcoin is trading at $84,197.
