BlackRock Attributes Bitcoin’s Steep Pullback to Deleveraging and Flows

BlackRock is upholding Bitcoin’s (BTC) value as a distinctive portfolio diversifier and emerging monetary alternative despite its sharp recent decline.

The asset manager says the sell-off resulted from extreme speculative positioning and flow shifts instead of any structural shift in the cryptocurrency’s long-term trajectory.

Bitcoin surged to all-time highs above $120,000 in October 2025 before retracing more than 50% to below $60,000 by June 2026.

Futures open interest peaked above $90 billion, mostly in highly leveraged offshore perpetual contracts, before a macro risk-off event driven by China tariff headlines triggered massive liquidations, including a record $20 billion single-day drop in open interest.

Spot Bitcoin ETPs drew $60 billion in inflows from January 2024 through October 2025 but later saw more than $5 billion in outflows as capital rotated toward AI-themed products.

“We view the sell-off as a function of idiosyncratic deleveraging and flow dynamics, and believe Bitcoin’s core investment case as an important emerging global monetary alternative and unique portfolio diversifier remains unchanged.”

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