BlackRock has maintained a positive outlook on Bitcoin's role in investment portfolios, despite its value plummeting more than 50% from its peak in October. Analysts attribute this sell-off to deleveraging and capital reallocation rather than a fundamental change in Bitcoin's investment case.
The firm’s updated ten-year analysis suggests that hypothetically adding 1-2% of Bitcoin to a traditional portfolio composed of 60% stocks and 40% bonds would historically enhance its risk-adjusted returns.
Deleveraging Following Records
After reaching a low at the end of 2022, Bitcoin surged approximately 700%, hitting an all-time high in October 2025. By early June 2026, however, its price had halved, dropping below $60,000.
Source: BlackRock.According to analysts, the total open interest in Bitcoin futures exceeded $90 billion by early October 2025, with around 80% of that in perpetual contracts outside of the CME, where some exchanges offer leverage of up to 50-125x.
The introduction of additional tariffs by the U.S. against China triggered a sell-off in global markets, with the S&P 500, Nasdaq, and stocks in emerging markets losing 3-4% in October, while Bitcoin fell 6% and Ethereum dropped 11%.
The impact on the crypto market was particularly pronounced, with open interest in Bitcoin declining by about $20 billion in a single day, marking the largest one-day drop recorded in BlackRock's study.
Source: BlackRock.Further waves of forced liquidations occurred in February and June 2026, coinciding with additional declines in Bitcoin's value. BlackRock views these developments primarily as a "correction of positioning," with the market shedding a significant amount of accumulated leverage.
Source: BlackRock.Investors Shift Focus to AI
Another pressure factor identified by analysts is the slowdown in institutional demand. From January 2024 to the fall of 2025, Bitcoin-based spot exchange products attracted around $60 billion. However, following the October reversal, outflows from this category amounted to approximately $5 billion by July 2026.
In contrast, investments in AI-related funds surged significantly. According to Bloomberg data cited by BlackRock, from October 2025 to July 2026, these products attracted over $46 billion, compared to around $10 billion from January 2024 to September 2025.
BlackRock believes that the rising interest in stocks of companies involved in artificial intelligence may be competing with Bitcoin for investment capital.
The AI Thematic category in the study is broadly defined, including not only specialized AI ETFs but also semiconductor sector funds, leveraged products on individual chip manufacturers, as well as index and actively managed funds with AI exposure. Thus, the reported figures do not necessarily indicate a direct $46 billion shift from Bitcoin to AI.
Source: BlackRock.Strategy Heightens Market Concerns
BlackRock also cited a shift in investor sentiment towards companies holding Bitcoin on their balance sheets, particularly Strategy.
This firm, led by Michael Saylor, holds about 4% of Bitcoin's maximum supply. Analysts noted that in July 2025, Strategy began issuing preferred shares, raising significant capital to accelerate its Bitcoin accumulation.
Between May 26 and 31, 2026, Strategy conducted a test sale of 32 BTC for approximately $2.5 million, representing about 0.004% of its Bitcoin holdings. Following this announcement, the asset dropped to $70,000, and subsequently fell below $60,000 during the June liquidation wave.
BlackRock views this episode not as a proven cause of the broader decline, but as a signal of changing investor attitudes towards companies financing cryptocurrency purchases through equity and debt issuance.
Later, Strategy updated its capital allocation rules, allowing for the potential sale of Bitcoins to fund the buyback of common and preferred shares.
Furthermore, in Q4 2025 and the first half of 2026, there was an increase in large sales and transfers from other holders. BlackRock cites examples including older Bitcoin holders, miners, and significant transactions via exchange products.
The report also mentions a block trade of IBIT shares valued at approximately $1.3 billion that occurred in May. BlackRock categorizes this as an example of large liquidations through exchange products, noting that it involved the sale of a position by an investor rather than the sale of Bitcoins by the firm itself.
Source: BlackRock.Bitcoin Exhibits "Dual Nature"
Despite the correction, BlackRock continues to assert Bitcoin’s potential as a diversification tool. Analysts describe its behavior as exhibiting a "dual nature": under certain conditions, the asset moves in tandem with risk markets, while in others, it can serve as a protective instrument.
This first model is especially evident during periods of mass deleveraging. In February 2026, the correlation between Bitcoin and risk assets increased amid position liquidations. BlackRock connects such episodes primarily to market structure: the higher the speculative leverage accumulated before a sell-off, the more Bitcoin tends to move alongside other risk assets.
However, over the long term, the picture is different. According to BlackRock's own calculations, the average ten-year correlation of Bitcoin with the S&P 500 is 0.18. For gold, this figure is 0.06; for the broader commodity market, it is 0.29; for emerging market stocks, it is 0.57; and for high-yield U.S. bonds, it is 0.69.
The firm considers short-term spikes in correlation to be episodic rather than structural. Following the significant reduction of leverage, signs of a new divergence in dynamics have emerged. In Q2, the financing rates for perpetual Bitcoin futures briefly turned negative, while demand for U.S. equities remained strong.
BlackRock interprets this as indicating a substantial reduction in speculative positioning, creating conditions for Bitcoin to return to a lower correlation with other risk assets.
Volatility Decreased, Yet Remains High
BlackRock’s report notes a gradual decline in Bitcoin's volatility. A decade ago, its annual volatility often exceeded 100%. For much of the last two to three years, it has remained below 50%.
By the end of June 2026, the realized 12-month volatility of Bitcoin was around 40%. For comparison:
- gold — 26%;
- stocks of the "Magnificent Seven" — 20%;
- emerging market stocks — 20%;
- S&P 500 — 12%;
- investment-grade U.S. bonds — 4%.
BlackRock links the long-term decline in this metric to the development of market infrastructure: initially, Bitcoin trading was primarily concentrated on spot crypto exchanges with relatively low liquidity. Subsequently, perpetual futures, regulated CME contracts, options, and U.S. spot exchange products emerged.
The growth of arbitrage and hedging among these segments has deepened market liquidity and enhanced its capacity to absorb large capital movements. However, this trend is not one-sided. Analysts acknowledge that the rise of the high-leverage perpetual futures market over the past year has partially countered the decline in volatility and could again amplify sharp price movements.
BlackRock manages the largest U.S. spot exchange product based on Bitcoin, the iShares Bitcoin Trust. The firm earns management fees from the fund and has a direct interest in investor demand for such instruments.
This conflict of interest is not concealed in the document. On the last page, BlackRock warns of the high volatility of digital assets, the potential for complete loss of investments, risks of hacks, large sales by holders, and changes in market sentiment.
Furthermore, the company explicitly states that the study is not a forecast, investment recommendation, or an offer to buy or sell securities.
Notably, on August 11, Robert Mitchnik, head of BlackRock's digital asset division, indicated that Bitcoin's dynamics have begun to diverge from the stock market. In his view, this reinforces the thesis of Bitcoin as a diversification tool.