Robbie Mitchnick, Head of Digital Assets at BlackRock, shared insights into the firm’s crypto strategy. BlackRock has been developing its approach for much longer than many might realize.

Mitchnick discussed BlackRock’s journey, Bitcoin’s role as an asset, ETFs, and the future of digital assets.

A Long Road to Public Adoption

Mitchnick revealed that BlackRock’s interest in crypto began as early as 2016, although the firm didn’t consider the asset class “ready for prime time” at the time. This marked the beginning of BlackRock’s crypto journey, quietly building capabilities before making larger public moves.

“The evolution really started to accelerate in the 2021-2022 timeframe. There were three key drivers behind this shift: The infrastructure around the system started to mature; A growing recognition that crypto was here to stay; A durable trend of clients showing increasing interest in the space,” Mitchnick noted.

Since this turning point, BlackRock’s involvement in crypto has increased, especially with the launch of its Bitcoin and Ethereum ETFs, which Ryan Sean Adams described as a “Christmas miracle.” Education has played a crucial role in BlackRock’s strategy, as the firm aims to introduce a largely crypto-naive audience to the space.

Mitchnick emphasized the need to combat misunderstandings, such as the notion that Bitcoin is a “risk-on” asset. While Bitcoin is considered risky, risk-on assets are typically favored during bull markets. The confusion around Bitcoin being pitched as “digital gold” has led to misconceptions among newcomers.

“If you look at the Silicon Valley Bank and regional banking crisis in March 2023, that was probably the clearest example of Bitcoin acting as a hedge. The main reason it stood out was that the crypto research community didn’t have time to overcomplicate it,” Mitchnick explained.

BlackRock’s focus on education is essential in shifting these perceptions. In fast-moving markets, vague beliefs can quickly shape market behavior.

Mitchnick also mentioned that BlackRock would soon release an explainer on risk for their broader client base, while noting that Bitcoin tends to be favored by traders and Ethereum by developers. As for the possibility of a third ETF approval, he didn’t see a clear frontrunner at the moment.

A Future in Tokenization?

Mitchnick also touched on BlackRock’s view of tokenization, noting that while the idea of “blockchain, not Bitcoin” is fading, “tokenization, not Bitcoin” is gaining traction. Although the long-term viability of tokenization remains uncertain, BlackRock is working on the necessary infrastructure to support it.

“Our strategy is to provide clients with cheap and easy access to these markets and to offer technological capabilities. It would be strange if, 10 years from now, we only had seven tokenized funds. It’s more likely we’ll have none, or many,” Mitchnick stated.

BlackRock’s methodical approach to crypto demonstrates the firm’s commitment to both long-term viability and education. As more clients express interest, BlackRock is positioning itself as a leader in providing accessible digital asset investments.

While the future of tokenization and ETFs remains uncertain, BlackRock’s strategy suggests that the firm will remain a significant player in the industry, no matter how it shifts.