Bitcoin (BTC) falling more than 50% from its $126,200 all-time high was a “positioning correction,” BlackRock says.
Key points:
A BlackRock report attributes Bitcoin’s decline below $60,000 to cascading liquidations as leverage was purged from the market.The long-term BTC investment thesis as a “low-correlation diversifier” remains intact, analysts confirm.BlackRock sees Bitcoin’s risk-asset correlation declining as time goes on.
BlackRock predicts falling correlation of BTC with risk assets
In a report published this week, the world’s largest asset manager preserved its bull thesis despite waves of outflows from its spot Bitcoin exchange-traded fund (ETF) in 2026.
BlackRock’s iShares Bitcoin Trust (IBIT) saw net outflows of $78.9 million in the week through Aug. 14. Across all ETF products, outflows totaled $267.2 million.
“We view bitcoin’s ~50% pullback from October 2025 highs as a positioning correction rather than a change in its investment case. A historically overleveraged market, enabled by perpetual futures, suffered cascading liquidations compounded by slowing ETP outflows and digital asset treasury demand,” the report states.
US spot Bitcoin ETF netflows (screenshot). Source: Farside Investors
During last year’s peak, Bitcoin experienced a surge in speculative positioning. BlackRock pointed to open interest on Bitcoin derivatives markets passing $90 billion in early October amid heavy use of leverage. The unwinding of these positions increased the correlation between BTC/USD and risk assets more broadly.
“A macro-driven risk-off catalyst (China tariff headlines) triggered large-scale deleveraging across precious metals and crypto markets. The resulting liquidation waves drove prices down to cycle lows below $60,000 per bitcoin by June 2026,” it explained.
Bitcoin futures open interest data (screenshot). Source: BlackRock
Institutional Bitcoin demand has suffered this year as a combination of geopolitical uncertainty and growing inflation pressures saw capital flowing into established risk-asset classes, among them US equities, with the S&P 500 hitting record highs last week….
..
