The asset manager BlackRock has reaffirmed its confidence in Bitcoin’s long-term investment potential despite a more than 50% decline in its price from October 2025 highs to mid-2026 lows. The firm attributed the sell-off to “idiosyncratic deleveraging and flow dynamics” rather than fundamental shifts in the cryptocurrency’s trajectory.
Bitcoin’s value fell sharply following a deleveraging episode in February 2026, with futures open interest peaking at over $90 billion in October 2025, largely driven by leveraged perpetual contracts. BlackRock highlighted the asset’s dual role as both a haven and risk-correlated asset during periods of market stress, reinforcing its view of Bitcoin as a global monetary alternative and portfolio diversifier.
The launch of spot Bitcoin exchange-traded products (ETPs) in January 2024 initially attracted $60 billion in inflows, though this was followed by $5 billion in outflows by October 2025. Meanwhile, AI-themed investment products drew $30 billion during the same period, reflecting broader market trends.
BlackRock noted that allocating 1%-2% of a traditional 60/40 portfolio to Bitcoin could enhance risk-adjusted returns. However, concerns persist about the balance sheet sustainability of digital asset treasury entities, which may influence sentiment. The extent to which leveraged perpetual futures have offset Bitcoin’s declining volatility remains unclear.
Written by Oliver Grant
Markets Desk
