BlackRock has linked Bitcoin’s 50% decline from its October 2025 all-time high of $126,200 to a wave of liquidations from leveraged positions, while reaffirming its belief in the cryptocurrency as a “low-correlation diversifier” over the long term. The global asset manager’s analysis highlights a sharp drop in prices to below $60,000 by June 2026, citing macro-driven risk-off sentiment and large-scale deleveraging as key drivers.
The report notes significant outflows from BlackRock’s iShares Bitcoin Trust (IBIT), with $78.9 million in net outflows for the week ending August 14, contributing to total ETF outflows of $267.2 million. These movements followed a period of elevated derivatives open interest, which exceeded $90 billion in early October 2025, amplifying market sensitivity to volatility.
Bitcoin’s 12-month realized volatility stands at 40%, outpacing gold’s 26% and the S&P 500’s 12%, according to the analysis. Despite this, BlackRock argues that Bitcoin’s recent spikes in correlation with risk assets—such as a 0.18 six-month rolling correlation with the S&P 500—will likely revert to historical norms, aligning with its historical role as a diversifier.
The firm’s report underscores that Bitcoin’s 60-day returns surged to 113% following the 2020 U.S. election, suggesting cyclical patterns may persist. However, it warns that current price levels reflect a “positioning correction” rather than a fundamental shift in Bitcoin’s investment case, with expectations of eventual normalization in its relationship with traditional markets.
Written by Oliver Grant
Markets Desk
