BlackRock's Bitcoin Clients Not Backing Global Payment Adoption

BlackRock's Bitcoin clients aren’t ‘underwriting’ the case for global payments

Robbie Mitchnick, head of digital assets at BlackRock, emphasized that many of the firm's clients are not investing in Bitcoin with the expectation of it being used for everyday transactions. He pointed out the need for significant improvements in Bitcoin technology before it can effectively serve as a global payment tool.

Key Takeaways

Most of BlackRock’s clients view Bitcoin primarily as an asset, not as a payment method.
Mitchnick highlighted challenges that must be addressed for Bitcoin to scale successfully for everyday use.
Stablecoins are currently outperforming Bitcoin in the payment sector.
ARK Invest's CEO noted that stablecoins are taking over functions that Bitcoin was expected to fulfill, prompting a reassessment of Bitcoin's future price potential.

BlackRock Clients Focused Mainly on Asset Investment

In a recent interview, Robbie Mitchnick, who leads BlackRock's digital assets division, stated that most clients from leading asset management firms are not considering Bitcoin as a viable option for daily transactions. He mentioned, “I think for us, and most of our clients today, they’re not really underwriting to that global payment network case.” This sentiment indicates that clients are more interested in Bitcoin’s asset potential rather than its use in transactions, viewing it as a possible upside in the future.

Impediments to Bitcoin’s Daily Use

Mitchnick also pointed out that significant advancements are necessary for Bitcoin to be used effectively as a payment method. He remarked, “There’s a lot that needs to happen in terms of Bitcoin scaling, Lightning, and otherwise to make that possible.” Referring to recent findings from Galaxy Research, he noted concerns regarding the long-term sustainability of Bitcoin layer-2 solutions like "rollups," which aim to keep transactions efficient and cost-effective.

Meanwhile, he acknowledged the growing success of stablecoins in the payments arena, stating, “They do have massive product market fit as a payment instrument as a way of moving value around efficiently.”

Cryptocurrencies, BlackRock _Robbie Mitchnick spoke to Natalie Brunell on the Coin Stories podcast. Source:_Natalie Brunell

Mitchnick elaborated that stablecoins have considerable potential to expand beyond the current crypto trading landscape, with opportunities in retail remittance, corporate payments, and cross-border transactions. He suggested that while Bitcoin holds promise, particularly in the remittance sector, it’s still uncertain whether it can successfully dominate this space.

Rapid Growth of Stablecoins

Recently, ARK Invest CEO Cathie Wood remarked that the unexpected rapid growth of stablecoins has led her to lower her Bitcoin price forecast for 2030. “Stablecoins are usurping part of the role that we thought that Bitcoin would play,” she indicated.

Previously, Wood expected Bitcoin to reach $1.5 million by 2030, but with stablecoins capturing many of the use cases she initially believed would belong to Bitcoin, she adjusted her estimate downward by approximately $300,000. “I think emerging markets are huge in this regard and we’re starting to see institutions in the United States focused on new payment rails,” she added.

Tether co-founder Reeve Collins also shared his perspective, predicting that by 2030, “all currency” could transition into stablecoins, signaling a significant shift where all types of finance move onto blockchain technology.

Magazine:__Bitcoin whale Metaplanet ‘underwater’ but eyeing more BTC: Asia Express