BlackRock thinks Bitcoin could thrive in a recession – Will it?

• Blackrock’s Head of Digital Assets believes Bitcoin could thrive in a recessionary environment
• Bitcoin’s role as a safe haven is being tested right now

Bitcoin [BTC], at the time of writing, was trading at $85,387, up 2.30% in the last 24 hours. However, market sentiment remains divided. In fact, inflows have dropped by 54%, from 58.6K BTC/day to 26.9K BTC/day.

Despite this, Blackrock’s Robbie Mitchnick believes Bitcoin could thrive, even in a recession. He pointed out that Bitcoin benefits from fiscal stimulus, lower interest rates, and monetary easing – All common during economic downturns.

Additionally, fears of social unrest may push more people towards Bitcoin as a hedge. As Q2 unfolds, Bitcoin’s role as a safe haven will be put to the ultimate test. Will it prove its resilience?

Blackrock’s bullish outlook on Bitcoin

Through its iShares Bitcoin Trust ETF (IBIT), Blackrock has established itself as a major institutional player in the Bitcoin market, holding 570,582 BTC in its treasury. This includes a notable addition of 22,076 BTC this year alone.

In a recent interview, Robbie Mitchnick, Blackrock’s Head of Digital Assets, attributed Bitcoin’s decline below $80k on 10 March to “premature expectations” around the economic outlook. 

Source: TradingView (BTC/USDT)

According to AMBCrypto, key factors include early rate cut speculation, Bitcoin’s evolving role as a strategic reserve, and insufficient awareness of the U.S debt crisis.

Further compounding these pressures are Trump’s strict tariff plans. While the short-term market reaction led to the sharp “dip,” Blackrock’s $218.10 million in inflows – its monthly high – has reinforced Mitchnick’s thesis.

The likelihood of a U.S recession has returned to the forefront after the FOMC meeting, with Chairman Jerome Powell adopting a “wait-and-see” stance. Essentially, the possibility of a recession cannot be entirely ruled out just yet. 

Bitcoin’s resilience amid recessionary cycles

A key bullish signal during a recession is economic slowdown. Weak labor data dampens aggregate demand, prompting the Federal Reserve to inject liquidity via interest rate cuts. 

This liquidity influx often supports risk assets like Bitcoin in the medium term.

However, while Blackrock maintains a bullish position, a recession typically unfolds through a brief cycle of declining demand, rising unemployment, and market corrections. This could put Bitcoin’s safe-haven narrative to the test.

Bitcoin’s 22% decline from its all-time high of $109k could potentially signal the onset of a larger market correction, with more volatility ahead. This, unless Trump’s economic retest triggers a shift in market conditions.

In February, inflation saw a month-on-month decline of 0.2%, dipping from 3% in January.

Source: Trading Economics

This easing inflationary pressure has led the Fed to halt rate hikes, though the possibility of further hikes remains on the horizon.

Blackrock’s bullish thesis hinges on a more pronounced market flush-out – A sign that a deeper correction may be required before a bull market can truly materialize.