Nowadays, the head of Digital Assets of BlackRock Robert Mitchchnick is on the Bloomberg ETF IQSpeaked of what really drives the Golf in Bitcoin ETFs.
“They are many things that come together. From the gate, the demand for retail and investors …” said Mitschnick. “Now, more recently, we have only seen steady progress of more adoption of welfare adviser, more institutional adoption. It has been a mix of people who have been the first time that they have invested in something in the crypto space. And then on the other hand you have many people who have invested in Bitcoin for a long time and they make use of the Etpatel.”
When it comes to institutional adoption, Mitchnick says we are still early. ETF goods inspections usually last years, but some companies follow the process quickly.
“We quickly followed that by a number of companies, and we are talking about fast tracking,” said Mitschnick. “We are talking about, you know, quarters, not months. And slowly but surely, you think, I think, an acceleration, especially in the last few months of more remarkable companies that lower barriers, give approvals to their advisers to use them.”
The volatility of Bitcoin has recently decreased, making it more attractive for institutions looking for diversification. However, it remains volatile, but the risk and return profile differs from traditional assets.
“There is no doubt that it is relatively new technology,” Mitchchnick noted. “Although the volatility has come, it is still volatile, but at the same time they are risky and returning to most of the rest of the assets in a traditional portfolio, and that is important. And therefore when institutions look at this, they are heavily focused on that correlation and whether the portfolio is very periods, because the construction is negative in some periods.”
About a dozen Bitcoin ETF’s are currently competing on the market and demand remains strong.
“Well, being a lot of them, you know, also very successful,” said Mitchchnick. “It is clear that it was the leader in the category with a fair margin. But there has been such a requirement that it was, you know, it was exciting and there are many products in space and that is a good thing.”