BlackRock Warns Leverage on Derivatives Is Undermining Bitcoin’s Hedge Case
BlackRock’s head of digital assets warned on Feb. 15 that intense speculation and high leverage on crypto derivatives venues are driving outsized price swings, eroding bitcoin’s standing as a dependable hedge. According to the firm’s view, concentrated leveraged positions and recurring liquidations can distort spot markets and make BTC behave more like a speculative risk asset than a store of value.
The observation matters because BlackRock is a major institutional allocator and its assessment could influence investor caution and regulatory scrutiny. If derivatives-driven volatility persists, allocators that sought diversification through bitcoin may rethink exposure, potentially affecting ETF flows, liquidity and hedging costs. Market participants will be watching funding rates, open interest and any policy responses to see whether structural changes are needed to restore bitcoin’s hedge narrative.