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Rampant speculation on crypto derivatives platforms is fueling volatility and risking bitcoin’s image as a stable hedge, says BlackRock’s digital assets chief.
These days where you have a tiny little thing that shouldn't have any price impact really at all — and if it does, should be small — like, for example, October 10th, some tariff-related thing, and next thing you know, [bitcoin] is down 20%,” Mitchnick said. “That’s because you get cascading liquidations and auto-deleveraging.”
While bitcoin’s long-term value proposition as a “global, scarce, decentralized monetary asset” remains intact, Mitchnick warned that the asset’s short-term trading behavior is starting to look dangerously similar to “levered NASDAQ” — a perception that may deter conservative allocators from entering the space.
The facts are more on the side of how I characterized it,” he said, referring to bitcoin’s fundamental attributes. “But now the trading data, at least lately, looks very different, and the bar to adoption if it trades like levered NASDAQ is much, much, much higher.”
Mitchnick also pushed back on the idea that exchange-traded funds (ETFs) like IBIT are contributing to volatility, pointing instead to perpetual futures platforms as the source of instability.
There’s a misperception out there that it’s a bunch of hedge funds in ETFs that are creating volatility and selling; that’s not what we’re seeing,” he said. “On a week that was tumultuous, obviously, in the bitcoin market, we had 0.2% of the fund redeem. If there actually were hedge funds massively unwinding trades… you would have seen billions. We saw many billions liquidated on these levered platforms.”
Despite short-term turbulence, Mitchnick emphasized that BlackRock remains committed to digital assets as part of a broader financial transformation.
We see ourselves as having the role of a bridge… between traditional finance and the digital asset world,” he said. “Over time, there’s certainly going to continue to be a greater role for digital assets and this technology theme in general for many of our clients.”
Read More: Bitcoin May Evolve Into Low-Beta Equity Play Reflexively, BlackRock's Mitchnik Says
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BlackRock's $BTC (IBIT) faced its largest single-day outflow since launch, with $332.6M withdrawn on Jan. 2, following the New Year's holiday. This marks the third consecutive trading day of outflows, totaling $392.6M over the past week.

Despite this, IBIT ranked third in 2024 net ETF inflows with $37.2B, trailing only Vanguard and iShares Core S&P 500 funds. $BTC pioneer Adam Back speculated that Bitcoin ETFs might take the top spot in 2025 with higher prices and inflows.
Meanwhile, competitors like Bitwise, Fidelity, and Ark 21Shares saw inflows of $48.3M, $36.2M, and $16.5M, respectively, partially offsetting BlackRock's losses. The total outflows for Jan. 2 stood at $242M, highlighting a turbulent day for Bitcoin investment products.
Predictions for 2025 include the launch of spot BTC-ETH ETFs, staking for Ether funds, and potentially a spot $SOL ETF. The crypto ETF market remains dynamic as investors weigh opportunities and risks.

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