BlackRock report attributes Bitcoin's 50%+ pullback from October 2025 peak to deleveraging and weak capital flows, not fundamentals, maintaining long-term institutional bullish stance.
Macro & Markets ·
BlackRock attributed Bitcoin's decline of more than 50% from its October 2025 peak to deleveraging, weakened capital flows, and reduced treasury purchases rather than deterioration in its long-term fundamentals. At the time of the peak, crypto futures open interest exceeded $90 billion, with approximately 80% originating from perpetual contracts traded outside the CME; tariff-related shocks subsequently triggered liquidation waves that pushed Bitcoin below $60,000 in June 2026.
Spot Bitcoin ETPs accumulated roughly $60 billion in inflows between January 2024 and October 2025, then experienced approximately $5 billion in net outflows, while AI-focused funds drew more than $46 billion in inflows across that window. Sales by Strategy and other digital asset treasuries alongside large holder liquidations intensified downward pressure on prices during this period.
BlackRock maintains that a modest Bitcoin position can serve portfolio diversification and function as a hedge against fiat currency depreciation, signaling the firm's institutional positioning remains constructive on longer timeframes despite the interim correction. What remains unspecified is the magnitude of selling from digital asset treasuries and the duration over which BlackRock expects such positioning to demonstrate its stated hedging properties.