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According to Robbie Mitchnick, head of BlackRock’s digital assets, Bitcoin could see strong growth during a US recession, as it is more likely to do well than some analysts believe it will during a recession.
In an interview on March 19, Mitchnick told Yahoo Finance that “I don’t know whether we’ll have a recession or not,” but should one strike, Bitcoin would do especially favorably.
Bitcoin May Rise as Government Spending Increases During a Recession
Mitchnick said that higher government spending, building up deficits, lower interest rates, and monetary stimulus all tend to happen during recessions and make Bitcoin grow.
“And to some extent, it’s sparked by fears of general social disorder,” Mitchnick said. “This unfortunate scenario can also occur during a recession.
Mitchnick pointed out that the market for Bitcoin is ‘not particularly well calibrated,’ as many investors still see it as a risky asset.
In September, Mitchnick said that during the economic crisis, risk-on assets like stocks, commodities, and high-yield bonds tend to lose value. But he also said that he still believed the asset was mislabeled.
Mitchnick said, “But that’s where the opportunity for education comes in a market and asset class that are still in their early stages.” BlackRock has been helping some of its clients see through some of these different stories.
BlackRock Clients View Bitcoin Dip as a Buying Opportunity
He also said that some of BlackRock’s “sophisticated long-term Bitcoin accumulator” clients don’t mind the current economic headwinds and see the market correction as a chance to buy.
Not everyone shares BlackRock’s view. Coinbase researchers, on the other hand, were not as optimistic. They said that the cryptocurrency market’s positive outlook for the first quarter had “clearly been misplaced” by worries about a recession and the recent tariffs.
Fears of a major slowdown or recession in the US economy have caused a sharp shift in public opinion. Coinbase stated this in its March 17 monthly outlook report. A related report mentions a possible US recession as a risk for the crypto market in 2025. It also highlights a circular crypto economy as another risk.
It’s iShares Bitcoin Trust ETF holds the most net assets among all Bitcoin investment products, totaling $48.7 billion. It has played a major role in helping institutions and wealth advisors accept Bitcoin.”
Mitchnick isn’t worried about the large net outflows from most spot Bitcoin exchange-traded funds lately. He says this is mainly because hedge funds are exiting the spot futures arbitrage trade. However, long-term investors still plan to hold their money.
At the time of writing, Bitcoin is trading at $85,782. This is about 3.14% higher than it was 24 hours ago.
Mitchnick’s view is clear: Bitcoin isn’t just another risky asset; it could be a strong performer in tough economic times. While not everyone agrees with this. However, BlackRock plays a big role in institutional Bitcoin investment. This shows many long-term investors are still bullish. Bitcoin’s position in the global financial system is solidifying, regardless of whether the US experiences a recession or not.
