NEW YORK — Robert Mitchnick, BlackRock's head of digital assets, warned that the crypto market's growing reliance on leverage is doing long-term damage to Bitcoin's institutional appeal. Speaking at the Bitcoin Investor Week conference alongside Anthony Pompliano and Dan Tapiero, Mitchnick said excessive speculation — particularly on leveraged derivatives platforms — is introducing instability that threatens Bitcoin's positioning as a serious portfolio hedge.
One tariff rumor, 20% drop: cascading liquidations are the culprit
Mitchnick cited an example from October 10: a tariff-related headline that should have had little to no price impact instead triggered a 20% drop in Bitcoin. “That’s because you get cascading liquidations and auto-deleveraging,” he said. Such leverage-driven swings are making Bitcoin's short-term behavior look dangerously like “levered NASDAQ,” a perception that could deter conservative allocators from entering the space.
ETFs not the volatility source: iShares Bitcoin ETF saw only 0.2% redemption
Mitchnick rejected the idea that ETFs like IBIT contribute to volatility. “On a week that was tumultuous, obviously, in the bitcoin market, we had 0.2% of the fund redeem,” he said. “If there actually were hedge funds massively unwinding trades … you would have seen billions. We saw many billions liquidated on these levered platforms.” Perpetual futures platforms, not spot ETFs, are the real source of instability.
Bitcoin trades like 'levered NASDAQ' — a higher bar for institutional adoption
While Bitcoin’s long-term value proposition as a “global, scarce, decentralized monetary asset” remains intact, Mitchnick noted that its trading data “at least lately, looks very different.” If Bitcoin continues to behave like levered NASDAQ, the bar to adoption becomes “much, much, much higher.” He stressed that the fundamental facts are on Bitcoin’s side, but the trading behavior risks scaring off serious investors. Despite the turbulence, Mitchnick reaffirmed BlackRock’s role as a bridge between traditional finance and digital assets, expecting digital assets to play a larger role for clients over time.