The digital assets chief at BlackRock says excessive leverage is putting Bitcoin’s investment thesis at risk.

Heavy speculation on crypto derivatives exchanges is amplifying volatility and clouding bitcoin’s image as a reliable hedge, according to BlackRock’s head of digital assets.

NEW YORK — Despite the blockbuster debut of BlackRock’s iShares Bitcoin ETF (IBIT), concerns are mounting that rising leverage across the crypto ecosystem could dent bitcoin’s standing with institutional investors. Robert Mitchnick, who leads digital assets at the asset-management giant, said the issue is not bitcoin’s fundamentals but the way it is being traded.

Appearing at the Bitcoin Investor Week conference in New York alongside Anthony Pompliano and investor Dan Tapiero, Mitchnick said bitcoin’s long-term investment case remains grounded in its scarcity and decentralized nature. However, he warned that excessive risk-taking — especially on perpetual futures platforms offering high leverage — is creating destabilizing price action.

Minor headlines, he noted, have recently triggered sharp sell-offs that appear disproportionate to the underlying news. Such moves are often intensified by cascading liquidations and automated deleveraging mechanisms embedded in derivatives markets.

While Mitchnick maintained that bitcoin still represents a “global, scarce, decentralized monetary asset,” he acknowledged that its recent trading behavior resembles that of a leveraged technology stock index. If that perception takes hold, he said, more conservative capital allocators may hesitate to treat the asset as a portfolio hedge.

He also challenged the narrative that exchange-traded funds like IBIT are exacerbating volatility. Fund flows, he said, have remained relatively stable even during turbulent weeks. In one recent stretch of market stress, IBIT saw redemptions amounting to just 0.2% of assets — far from the large-scale unwinds some observers had speculated about.

By contrast, billions of dollars in positions were liquidated across leveraged crypto derivatives platforms during the same period, highlighting where much of the instability originates.

Despite short-term turbulence, Mitchnick emphasized that BlackRock continues to view digital assets as a key part of the financial system’s evolution. The firm aims to serve as a conduit between traditional finance and the crypto sector, anticipating that digital assets and blockchain-based technologies will assume a growing role in institutional portfolios over time.

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