BlackRock's head of digital assets has confirmed that institutional investors purchasing Bitcoin through the world's largest asset manager are not betting on the cryptocurrency's future as a global payment network, viewing it instead primarily as a store of value comparable to digital gold.
Robert Mitchnick, who oversees BlackRock's digital asset division, stated during a Friday podcast interview that most clients remain focused on Bitcoin's role as a wealth preservation mechanism rather than its potential to facilitate everyday transactions. His comments arrive as BlackRock's iShares Bitcoin Trust manages $73 billion in assets, making it the world's largest spot Bitcoin exchange-traded fund.
"For us, and most of our clients today, they're not really underwriting to that global payment network case," Mitchnick told Natalie Brunell on the Coin Stories podcast. "That's sort of maybe out-of-the-money option value upside."
Scaling Challenges Keep Payment Thesis Speculative
Mitchnick described Bitcoin's potential transformation into a widespread payment rail as "a little bit more speculative" than the digital gold narrative driving current institutional adoption. He emphasized that significant technical progress would be required before such a shift could materialize.
"A lot needs to happen in terms of Bitcoin scaling, Lightning, and otherwise to make that possible," he explained, referencing the technical infrastructure that would need to mature for Bitcoin to handle mass payment volumes efficiently.
His assessment aligns with research challenging Bitcoin's near-term viability for everyday transactions. A Galaxy Research report from August 2024 concluded that most Bitcoin layer-2 networks, particularly rollups promoted as solutions for cheaper and faster transactions, may struggle to remain sustainable over time.
The comments underscore a growing consensus among institutional players that Bitcoin's value proposition centers on scarcity and portability as a long-term asset rather than transactional utility. Mitchnick acknowledged that Bitcoin might eventually find competitive positioning in retail remittance payments, particularly to emerging markets, but characterized even this outcome as speculative for now.
Stablecoins Capture Payment Market Share
While Bitcoin's payment future remains uncertain, Mitchnick highlighted that digital assets are already transforming money movement through stablecoins. These dollar-pegged tokens have demonstrated what he called "massive product market fit as a payment instrument" for moving value efficiently.
"Stablecoins have been hugely successful in the payments sector," Mitchnick stated. He projected that stablecoins could expand far beyond their current applications in cryptocurrency trading and decentralized finance to encompass retail remittances, corporate cross-border transactions, and capital market settlement activities.
The stablecoin market has experienced explosive growth, with total market capitalization surpassing $300 billion in 2025. This momentum has reshaped expectations about which digital assets will dominate payment flows, with implications extending to long-term Bitcoin price forecasts.
ARK Invest CEO Cathie Wood recently reduced her firm's 2030 Bitcoin bull case target from $1.5 million to $1.2 million, citing stablecoins' rapid scaling as the primary reason for the $300,000 adjustment. "Stablecoins are usurping part of the role we thought Bitcoin would play," Wood explained during a November CNBC appearance. "Given what's happening to stablecoins — serving emerging markets in the way we thought Bitcoin would — I think we could take $300,000 off of that bullish case."
Wood noted that stablecoins are scaling faster than anyone anticipated, particularly in emerging markets where they provide payment and remittance functionality that cryptocurrency advocates once envisioned for Bitcoin itself.
Record Outflows Test Institutional Conviction
Mitchnick's comments on Bitcoin's investment thesis arrive amid unprecedented volatility in institutional Bitcoin holdings. BlackRock's IBIT ETF posted record outflows of $523 million on November 19, marking the largest single-day redemption since the fund's January 2024 launch.
The ETF has hemorrhaged more than $2.47 billion in November alone, representing 63% of total outflows across all 11 U.S. spot Bitcoin ETFs, which collectively saw $3.79 billion in withdrawals during the month. The redemptions coincided with Bitcoin's 23% price decline from its October all-time high of $126,080 to approximately $86,700 by late November.
"IBIT had worst day of outflows ever yesterday... ugly stretch," Bloomberg Senior ETF Analyst Eric Balchunas wrote, though he noted that net inflows still topped "an astronomical" $25 billion for the year. IBIT shares fell more than 16% over the month to $52, levels last seen in April 2025.
The exodus pushed most ETF holders underwater. Research from Bianco Research indicates the weighted-average entry price for spot Bitcoin ETF holders sits above $90,000, meaning the average buyer entered near breakeven levels after Bitcoin's recent slide below that threshold.
The 250-day put-call skew for IBIT options reached 3.1%, the highest level in seven months according to MarketChameleon data. The elevated skew shows put options trading at a premium over calls, indicating traders are aggressively hedging against further price declines.
Despite the outflows, last week's trading volume shattered records with $40.32 billion in cumulative volume across all spot Bitcoin ETFs. IBIT accounted for nearly 70% of that activity with $27.79 billion in trading, suggesting the outflows represent institutional repositioning rather than wholesale abandonment.
Digital Gold Thesis Remains Central to Investment Case
Mitchnick's emphasis on Bitcoin as digital gold reflects a broader institutional view that the cryptocurrency's primary value derives from its fixed supply and decentralized nature rather than its transactional capabilities. In September, he previously stated that Bitcoin is "mistakenly classified as a risky asset" despite its frequent correlation with equity markets.
The store-of-value narrative positions Bitcoin as a hedge against monetary debasement and traditional financial system instability, similar to how investors have historically viewed gold. This framing has proven particularly appealing to institutional allocators seeking portfolio diversification and inflation protection.
BlackRock manages approximately $12.5 trillion in total assets as of June 2025, making it the world's largest asset manager. The firm's Bitcoin ETF launched in January 2024 and reached $70 billion in inflows faster than any ETF in the industry's 32-year history, demonstrating substantial institutional appetite for regulated Bitcoin exposure.
Mitchnick's comments suggest BlackRock views Bitcoin's evolution as bifurcating, with the cryptocurrency solidifying its position as a store-of-value asset while stablecoins capture the payments and remittance markets. This specialization could ultimately strengthen both asset categories by allowing each to optimize for its primary use case rather than attempting to serve all functions simultaneously.
Implications for Bitcoin's Development Roadmap
The institutional preference for Bitcoin as digital gold rather than a payment system may influence development priorities for the network. If major capital allocators like BlackRock's clients are not underwriting payment functionality, it could reduce pressure on Bitcoin developers to prioritize scaling solutions at the expense of security and decentralization.
The Lightning Network, Bitcoin's primary layer-2 payment solution, has struggled to gain significant traction despite years of development. Recent data shows Lightning capacity has stagnated while other layer-2 approaches have faced questions about long-term economic viability and security trade-offs.
Conversely, the success of stablecoins suggests market participants value the transactional properties of blockchain technology when delivered through assets that maintain price stability. Major stablecoins like Tether (USDT) and USD Coin (USDC) now rank among the top five cryptocurrencies by market capitalization, with Tether holding the third position.
The July 2025 passage of the GENIUS Act, which established a regulatory framework for stablecoin issuance and trading in the United States, further legitimized these assets for institutional use. The legislation followed years of regulatory uncertainty and provided clarity that could accelerate corporate and financial institution adoption.
Market Adjusts to Specialized Digital Asset Roles
The divergence between Bitcoin's store-of-value thesis and stablecoins' payment utility reflects a maturing cryptocurrency market where different assets serve distinct functions rather than competing directly. This specialization mirrors traditional finance, where gold serves as a reserve asset while fiat currencies facilitate everyday transactions.
Wood's revised Bitcoin forecast, while lower than her previous target, still represents enormous upside from current levels. Her $1.2 million projection would require Bitcoin to appreciate more than tenfold from its late November price around $100,000, underscoring that even proponents adjusting expectations for payment adoption remain bullish on the store-of-value case.
Mitchnick maintained that Bitcoin still belongs in investment portfolios despite recent volatility, citing global liquidity factors and on-chain fundamentals as enduring support for long-term value. However, his clear delineation between Bitcoin's proven role as digital gold and its speculative potential for payments provides institutional investors with a framework for understanding what they're actually buying when they allocate to the asset.
As cryptocurrency markets continue evolving, the separation between store-of-value assets like Bitcoin and transactional tools like stablecoins appears likely to deepen, with each category optimizing for its core function rather than attempting to satisfy all use cases simultaneously.