Despite Bitcoin’s recent correlation with US equities, Robbie Mitchnick, BlackRock’s head of digital assets, believes it’s a misnomer to label Bitcoin a “risk-on” asset. Traditionally, risk-on assets, like stocks, commodities, and high-yield bonds, perform well during periods of economic growth and market optimism, while assets like gold gain popularity during times of uncertainty.
In an interview with Bloomberg TV, Mitchnick pointed out that Bitcoin, similar to gold, shows temporary correlations but remains largely uncorrelated in the long term. “Gold exhibits similar patterns, with long-term correlation close to zero,” he said.
Mitchnick emphasized Bitcoin’s unique attributes: it’s decentralized, scarce, and not controlled by any government or country. “When we consider Bitcoin, we see it primarily as an emerging global monetary alternative—scarce, global, decentralized, and non-sovereign, with no country-specific or counterparty risk,” he explained.
BlackRock manages exchange-traded funds (ETFs) investing in Bitcoin and Ether. While Bitcoin is often compared to digital gold, institutional clients find the narrative for Ether less clear, as it’s used by applications on the Ethereum blockchain.
So far in 2024, Bitcoin has risen by 49%, and Ether by 15%, thanks largely to the approval of ETFs that hold both tokens.
Bitcoin’s $5.8 Billion Options Expiry May Stir Market Volatility
With a significant $5.8 billion in Bitcoin options set to expire this Friday, market volatility is expected. According to Luuk Strijers of Deribit, the world’s leading cryptocurrency options exchange, the expiry may cause market swings as contracts near settlement.
Of the $5.8 billion in Bitcoin open interest, 20% of the contracts are currently “in-the-money,” meaning they have favorable strike prices compared to the current market rate. A similar trend is seen in Ether, which has $1.9 billion in options set to expire. These contracts can lead to market volatility as traders close or roll over their positions.
Strijers noted that the bullish bias seen in the options market suggests optimism for Bitcoin and Ether, particularly as the U.S. SEC recently greenlit options tied to BlackRock’s Bitcoin ETF. Analysts predict that Bitcoin’s rally could pick up steam once it surpasses the $65,200 level.
The concept of “max pain” is also in play. The max pain level for Friday’s expiry is $59,000, which is about 8% lower than the current spot price. This could exert downward pressure on Bitcoin prices as we approach the expiry. However, some believe that the crypto options market is still too small to have a significant impact on the spot price.
