The crypto world has suffered an “own goal,” according to BlackRock crypto executive Robert Mitchnick: it has convinced investors that Bitcoin is a “risk-on” asset like equities despite little long-term correlation with the stock market.

“Some of the crypto research-type publications and daily commentaries have taken the fact that Bitcoin is obviously a risky asset and extrapolated that to say that therefore it is a risk-on asset and should trade like equities,” Mitchnick, BlackRock’s head of digital assets, told Bloomberg TV Wednesday.

In fact, Bitcoin’s long-term correlation with the stock market is “close to zero,” he said. In that way, it’s a lot like gold, the traditional asset to which it’s most often compared.

“Gold shows a lot of the same patterns where you have these temporary periods where it spikes, but long term it’s close to zero,” he said of its correlation to the stock market.

BlackRock is the world’s largest asset manager, with almost $11 billion in assets under management, according to its latest quarterly report.

While initially sceptical of Bitcoin, BlackRock founder and CEO Larry Fink has repeatedly said he sees the “tokenisation” of traditional assets — putting them on blockchains — as “the next generation for markets.”

The firm has embraced crypto, launching an Ethereum-based tokenised fund as well as Bitcoin and Ether-based exchange traded funds.

Mitchnick’s comments echo a recent BlackRock report he co-authored, which called Bitcoin an “increasingly unique diversifier” against “fiscal, monetary and geopolitical risk factors.”

To be sure, Bitcoin is volatile, the report notes: It has outperformed “all major assets” in seven of the past 10 years, according to BlackRock. In the other three years, it was the “worst performing asset.”

But its value comes from a fundamentally different place than that of most stocks.

“We think of it primarily as an emerging global monetary alternative,” Mitchnick said of Bitcoin. “It is a scarce, global, decentralised, non-sovereign asset. It is an asset which has no country-specific risk, which has no traditional counterparty risk.”

While Bitcoin appears to move in lockstep with equities during “sudden shifts in U.S. dollar real interest rates or liquidity,” the BlackRock report notes, “these episodes have been short-term in nature.”

Institutional investors recognize that, according to Mitchnick.

“It confuses investors when people talk about it as risk-on, because, based on the properties I just described, you would think of it as risk-off,” he said.

Nevertheless, BlackRock stopped short of a full-throated recommendation in its report.

“Bitcoin held at modest allocations can have a diversifying effect on portfolios,” it said, “whereas at larger position sizes its elevated standalone volatility starts to have an outsized impact in increasing portfolio risk.”

While Bitcoin carries some resemblance to gold, institutional investors are less certain as to what drives the value of Ether, the world’s second-largest cryptocurrency, according to Mitchnick.

“The investor narrative and clarity, particularly on the more institutional side, is a little less clear for a lot of our institutional clients for Ethereum today,” he said.

BlackRock launched exchange-traded funds for Bitcoin and Ethereum earlier this year.

While the firm’s Bitcoin product has been a smash hit, some have described investors’ response to Ether-backed ETFs as relatively muted.

“The launch for [BlackRock’s] ETHA … has been very strong,” he said, citing its $1 billion in inflows within two months. “That’s a really good launch for an ETF.”

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can contact him at aleks@dlnews.com.