BlackRock Says Bitcoin’s 50%+ Drop Has Not Changed Its Long-Term Investment Case

BlackRock has maintained its long-term investment case for Bitcoin despite a drawdown of more than 50% from the cryptocurrency’s October 2025 all-time high, attributing the selloff to market positioning and deteriorating flows rather than a change in its underlying thesis.

Specifically, the asset manager said leverage was a major factor in the decline. Crypto futures open interest had climbed above $90 billion, with roughly 80% concentrated in perpetual futures outside the CME, leaving the market vulnerable when a China tariff shock triggered an initial wave of deleveraging, followed by further forced liquidations in February and June 2026. 

Capital flows also reversed after a sustained period of demand. Spot Bitcoin ETPs accumulated about $60 billion of inflows from January 2024 through October 2025. Since then, Bitcoin funds have recorded roughly $5 billion in aggregate outflows, while AI-themed funds attracted more than $46 billion.

Selling pressure also included a small Strategy test sale and disposals by large holders and miners. Meanwhile, BlackRock said slowing demand from digital asset treasury companies and growing skepticism about continued DAT accumulation weighed on the market.

Despite those pressures, BlackRock continues to view a small Bitcoin allocation as a potential source of portfolio diversification and a possible hedge against the erosion of fiat currencies’ purchasing power.

Source: BlackRock