Today, BlackRock Robert Mitchnick’s digital assets director at Bloomberg ETF IQ spoke about what is actually driving the surge in Bitcoin ETFs.
“It’s a lot of stuff coming in. Outside the gate was retail and investor demand…” Mitchinick said. “We’ve seen stable progress recently in adopting more wealth advisors, more institutional adoption. It’s a mixture of people who are new to invest in everything in the crypto sector, and there are a lot of people who have been invested in Bitcoin for a long time.
When it comes to institutional adoption, Mitchinick says we’re still too early. ETF approvals usually take years, but some companies are tracking the process quickly.
“We’ve seen them being tracked quickly by a lot of companies, and we’re talking about fast tracking,” Mitchinick said. “We’re talking about quarters, not months, and I think slowly and certainly, you’ve seen you give your advisors approval to use these, especially in the months of companies that are more prominent than lowering obstacles.”
Bitcoin volatility has recently declined, making it even more attractive to institutions seeking diversification. However, while remaining unstable, the risk and return profile differs from traditional assets.
“It’s definitely a relatively new technology,” commented Mitchinick. “The volatility is declining, but it is still unstable, but at the same time its risk and return drivers are significantly different from most of the remaining assets in the traditional portfolio, and that is important.
Currently, around 12 Bitcoin ETFs compete in the market, and demand remains strong.
“Well, a lot of them are very successful, you know,” Mitchinick said. “Obviously, it was a category leader with a considerable margin. But as you know, it’s exciting, there’s a lot of product in the space, and that’s a good thing.”
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