With the increasing likelihood of an economic recession in the US, the role of Bitcoin (BTC) as a safe asset is once again being tested. Robbie Mitchnick, the head of digital assets at BlackRock, believes that Bitcoin can thrive in recessionary conditions. Mitchnick points out that accommodative monetary policies, interest rate cuts, and increased liquidity typically seen during recessions could benefit Bitcoin. However, social concerns may also drive people towards Bitcoin. BlackRock, as one of the largest institutional investors in Bitcoin, has acquired 570,582 BTC units through its Exchange-Traded Fund (ETF). On the other hand, Bitcoin ETF funds, after enduring capital outflows of over $6 billion in the past two months, are now witnessing investor returns. According to SoSoValue data, on Friday, Bitcoin ETF funds recorded a total capital inflow of $165 million. BlackRock took the largest share of this inflow with $172 million, while some other funds are still facing capital outflows. It is worth mentioning that after a sharp decline in Bitcoin price below $80,000 on March 10, some analysts attributed this price drop to expectations of interest rate cuts by the Federal Reserve and the impact of US government economic policies. However, Bitcoin is still trading around $84,152 and had a 2.1% decrease in the past 24 hours. The key question is whether Bitcoin can truly act as a safe asset in an economic recession or not.
