BlackRock: A possible drop in Bitcoin returns after its adoption by Wall Street giants

BlackRock, one of the world's largest asset management firms, has indicated the possibility of declining investment returns in the crypto digital currency Bitcoin after its growing adoption by giant Wall Street financial institutions, according to. .. a report On the CNCB channel.

This does not necessarily mean maturity Bitcoin BTC Price Its peak, or exclude the appearance of future rising waves.

However, as the currency matures and moves toward an institutional route through exchange-traded funds, the days of huge gains could be a thing of the past, according to Robert Mitchnick, head of digital assets at BlackRock.

Discussions about the nature of investing in Bitcoin

At an investor conference in New York, Mitchnick stated clearly: Future returns will almost certainly decline... You won't earn as much as the 124% per year over the next decade over the last decade.

He also highlighted the decrease in extreme volatility that characterized Bitcoin over time, indicating the possibility that this decline will continue due to the impact of Bitcoin exchange-traded funds on trading activity. This view enjoys broad support among investors because trading funds improve the efficiency of price discovery when trading volume increases with the participation of large investors, especially institutions.

This topic coincides with the educational journey that BlackRock is undertaking with its clients to learn more about Bitcoin. This meets urgent customer demand to deal with cryptocurrencies in 2023.

And that was it The demand is “huge and clearIn 2023, BlackRock has requested the launch of its iShares Bitcoin Trust.

Mitchnick also confirmed that the company is discussing with its clients how to integrate “Bitcoin” into the formation of their investment portfolios and why this digital currency is a good option for diversifying investments despite its recent association with the movement of shares.

“Investors need to be careful... We will also see bull and bear markets, even in this world where institutions are adopting cryptocurrencies,” Mitchnick added. “The interesting question then becomes: how do we predict the direction of price movements?

Is the era of cyclical fluctuations over for Bitcoin?

With expectations of less volatility in the long term, investors are wondering what will happen to Bitcoin's cyclical fluctuations over roughly four years. This cycle is characterized by a strong increase for about three years followed by a year of decline.

This trend coincided with the halving event and the degree of difficulty of mining new currencies and adding blocks to the network (the mining process has now become more complex and requires very high equipment and devices). efficient).

Mitchnik concludes with a statement that may seem confusing to some, saying: I don't believe we've seen the end of Bitcoin cycles... There's an inherent reflexivity to that, and it's a concept that is difficult for many traditional people. investors need to understand.

Reflexivity here refers to the subjective impact of market expectations and movements on asset performance. In the case of Bitcoin, when the price rises, the chances of success and adoption as digital gold increase, and vice versa when the price falls. This interaction creates a continuous loop which confirms the continuity of cyclicity.

Conclusion: BlackRock highlights changes in the nature of the Bitcoin market, as it tends to stabilize and integrate into the traditional economy. This does not cancel out the possibility of future gains or the continuation of cyclicality, but at a less marked pace than before.