BlackRock Sees Shift in Bitcoin Sentiment as Decoupling from Equities Takes Hold

BlackRock's Head of Digital Assets Robert Mitchnick says there has been a shift in sentiment around Bitcoin, which has been trading between $60,000 and $65,000 for over two months. Mitchnick attributes this change to Bitcoin decoupling from equities, particularly AI stocks, which have had a significant impact on the market.

According to Mitchnick, Bitcoin's recent performance relative to equities is evidence of this shift. In July, when AI stocks experienced a pullback, Bitcoin outperformed significantly, demonstrating its potential as a diversifier and hedge against risks in other parts of the portfolio.

The downturn has not deterred investors in Bitcoin ETFs, which have consistently attracted 'fundamental, long-term, buy-and-hold' investors. Despite the decline, data shows that U.S. spot Bitcoin ETFs logged their best inflow week since mid-April, with BlackRock's IBIT fund accounting for over 80% of total inflows.

The recent Coldcard exploit has also led to speculation that some investors are moving their Bitcoin from self-custody into ETFs due to security concerns. Bloomberg Intelligence Senior ETF Analyst Eric Balchunas noted that both BlackRock and Fidelity's spot Bitcoin ETFs have benefited from inflows since the hack, suggesting a potential correlation.