US recession would be a big catalyst for Bitcoin: BlackRock

BlackRock’s head of digital assets, Robbie Mitchnick, says that Bitcoin will most likely thrive in a recessionary macro environment, contrary to what some analysts may think.

“I don’t know if we’ll have a recession or not, but a recession would be a big catalyst for Bitcoin,” Mitchnick  said  in a March 19 interview with Yahoo Finance.Mitchnick said Bitcoin is catalyzed by increased fiscal spending, deficit accumulation, lower interest rates and monetary stimulus — all of which tend to happen in recessions.

“And it’s catalyzed to some extent over fears of general social disorder,” Mitchnick pointed out. “And that too, unfortunately, is something that can happen in a recession.”

The BlackRock executive said the market is “not particularly well calibrated” to Bitcoin, and many still view it  as a risk-on asset .

Risk-on assets, such as stocks, commodities and high-yield bonds, tend to suffer during times of economic crises, but Mitchnick said in September that he believed the asset was mislabeled.

“But that’s where the opportunity comes in for education in a market and asset class that’s still very nascent.”

Mitchnick said BlackRock has been helping some of its clients see through some of these conflicting narratives.

He added that some of BlackRock’s more “sophisticated long-term Bitcoin accumulator” clients see the market correction as a buying opportunity and aren’t bothered by the  current economic headwinds.

Meanwhile, researchers from cryptocurrency exchange Coinbase were less bullish,  saying  crypto’s positive outlook for the first quarter had “clearly been misplaced” by recession fears and the recent tariffs imposed.

“Fears of a dramatic US economic slowdown or even recession have caused sentiment to turn sharply,” Coinbase Institutional said in its monthly outlook report on March 17.

BlackRock has played a key role in the institutional and wealth advisory adoption of Bitcoin through its  iShares Bitcoin Trust ETF  — which  holds  the most net assets of any Bitcoin investment product at $48.7 billion.

Mitchnick isn’t worried about the mass net outflows across most spot  Bitcoin exchange-traded funds  of late — pointing out that it has mostly come from hedge funds’ unwinding of the spot futures arbitrage trade, not the long-term buy-and-hold investors.

Bitcoin is  currently trading  at $86,000, up 3.8% over the last 24 hours.