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If you’re looking for Bitcoin to take you to the moon, your window of opportunity may be slowly closing, according to BlackRock. That doesn’t mean stocks have hit a ceiling or that an increase won’t happen. But as cryptocurrencies become more mature and institutionalized with the advent of exchange-traded funds, those days of huge profits may be a thing of the past, according to Robert Mitchnick, head of digital assets at BlackRock. He says he can’t. “Certainly, returns will be lower going forward,” he said Friday at the Bitcoin Investor’s Day conference in New York City. “We’re not going to make 124% annual returns over the next 10 years like we have over the past 10 years.” He also said that Bitcoin’s notorious volatility has steadily declined over time. He pointed out that given the impact Bitcoin ETFs are having on trading activity, it is likely that prices will continue to decline. This is a common view among investors. The idea is that by attracting more money and investors into the asset class, especially institutional investors with portfolio rebalancing strategies, ETFs will enable more efficient price discovery as volume increases. is. BTC.CM= .SPX,@GC.1 line 2014-03-26 Bitcoin is one of the best-performing assets of the past decade This topic is part of BlackRock’s Educational Journey with clients. ”, and its demand for exposure to Bitcoin first spurred the company’s foray into this new asset class in 2021. By 2023, when BlackRock filed to launch the iShares Bitcoin Trust, the demand was “large and clear.” Mitchnick also said the company is talking with clients about how Bitcoin fits into portfolio construction and why the cryptocurrency is a good diversifier despite the recent stock rally. “People need to be cautious… Even in a post-institutional world, there will be bull markets and there will be bear markets,” he said. “And what’s interesting is how you think about the direction of volatility.” Long-term volatility is expected to continue to decline, and some investors believe that Bitcoin’s four-year cycle (Bitcoin I have doubts that the 3-year uptrend before and after the halving, followed by the 1-year downtrend, could change in a similar way. “The end of the Bitcoin cycle is not yet in sight,” Mitchnick said. “by [bitcoin’s] In essence, there is a reflexivity there that is difficult for many traditional investors to understand. “Reflexivity refers to the self-reinforcing effect of market sentiment on asset performance.”[With] As Bitcoin’s price increases, in a sense, the probability of its success and adoption as digital gold also changes. “And as bad things happen and prices go down, those probabilities change as well,” he said. So it creates reflexivity, which just reinforces the idea that this kind of cycle is going to happen. I think they are still here to stay,” he added. —CNBC’s Ganesh Rao contributed reporting.
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