BlackRock maintained a positive view of bitcoin’s role in investment portfolios after a drop of more than 50% from the October peak. Analysts attributed the sell-off to deleveraging and capital rotation, rather than a fundamental change in the first cryptocurrency’s investment case.
According to the asset manager’s updated 10-year analysis, hypothetically adding 1–2% bitcoin to a traditional 60/40 (stocks/bonds) portfolio would have historically improved its risk-adjusted returns.
Deleveraging after the record high
From the late-2022 low, bitcoin rose about 700% and reached an all-time high in October 2025. By early June 2026, the price had fallen roughly by half — below $60,000.
Analysts said total open interest in bitcoin futures exceeded $90 billion by early October 2025. About 80% was in perpetual contracts outside the CME, where some platforms allow leverage of 50–125x.
The U.S. imposition of additional tariffs against China triggered a global sell-off: the S&P 500, Nasdaq and emerging-market equities fell 3–4% in October, bitcoin 6%, and Ethereum 11%.
The impact on the crypto market was especially pronounced. Open interest in bitcoin dropped by about $20 billion in a single day — the largest one-day decline over the study period cited by BlackRock.
Additional waves of forced liquidations occurred in February and June 2026 and accompanied further declines in bitcoin. BlackRock sees this mainly as a “positioning reset”: the market shed a significant portion of accumulated leverage.
Investors rotated into AI
Analysts also pointed to a slowdown in institutional demand. From January 2024 to fall 2025, spot bitcoin exchange-traded products attracted about $60 billion. After the October reversal, the trend changed: by July 2026, cumulative outflows from the category were roughly $5 billion.
At the same time, inflows into AI-related funds surged. Citing Bloomberg data, BlackRock said that from October 2025 to July 2026 such products took in more than $46 billion. Previously — from January 2024 to September 2025 — the figure was about $10 billion.
BlackRock believes growing interest in stocks with exposure to artificial intelligence may have competed with bitcoin for investment capital.
The AI Thematic category in the study is defined broadly. It includes not only specialized AI ETFs, but also semiconductor sector funds, leveraged products on individual chipmakers’ stocks, as well as index and actively managed funds with AI exposure. Therefore, the figures do not imply a direct shift of $46 billion specifically out of bitcoin into AI.
Strategy amplified market concerns
BlackRock cited a shift in investor attitudes toward companies with bitcoin on their balance sheets, particularly Strategy, as another source of pressure.
Michael Saylor’s firm holds about 4% of the first cryptocurrency’s maximum supply. Analysts noted that in July 2025 Strategy began issuing preferred shares and raised significant capital to accelerate bitcoin accumulation.
Between May 26 and 31, 2026, Strategy made a test sale of 32 BTC for about $2.5 million. The trade was about 0.004% of its bitcoin position. Immediately after the disclosure, the asset fell toward $70,000. Bitcoin later moved below $60,000 during the subsequent June wave of liquidations.
BlackRock does not view this episode as a proven cause of the broader decline, but as one signal of changing investor sentiment toward companies that finance cryptocurrency purchases through stock and debt issuance.
Later, Strategy updated its capital allocation rules, allowing potential bitcoin sales to finance buybacks of common and preferred shares.
In addition, in Q4 2025 and the first half of 2026, large sales and transfers by other holders became more frequent. BlackRock’s examples include long-time bitcoin holders, miners, and sizable transactions via exchange-traded products.
The report also mentions a block trade in IBIT shares of about $1.3 billion carried out in May. BlackRock classifies it as an example of large liquidations via exchange-traded products. It involved an investor selling a position, not the asset manager selling bitcoin.
Bitcoin displayed a “dual nature”
Despite the correction, BlackRock maintained the thesis of bitcoin as a potential diversification tool. Analysts described its behavior as having a “dual nature”: in some conditions the asset moves with risk markets, while in others it can act as a defensive instrument.
The first pattern is especially visible during broad deleveraging. In February 2026, bitcoin’s correlation with risk assets increased amid liquidations. BlackRock linked such episodes primarily to market structure: the more speculative leverage accumulated before a sell-off, the more bitcoin tends to move alongside other risk assets.
Over longer horizons, the picture differs. By BlackRock’s calculations, bitcoin’s average 10-year correlation with the S&P 500 is 0.18. For gold it is 0.06, for broad commodities 0.29, emerging-market equities 0.57, and U.S. high-yield bonds 0.69.
The firm views short-term correlation spikes as episodic rather than structural. After a significant reduction in leverage, signs of renewed divergence appeared. In Q2, funding rates on bitcoin perpetual futures briefly turned negative, while demand for U.S. equities persisted.
According to BlackRock, this points to a substantial reduction in speculative positioning and creates conditions for bitcoin to return to a lower correlation with other risk assets.
Volatility has fallen but remains high
BlackRock’s report notes a gradual decline in bitcoin’s volatility. A decade ago, its annual figure regularly exceeded 100%. For most of the past two to three years, it was below 50%.
As of late June 2026, bitcoin’s realized 12-month volatility was about 40%. For comparison:
- gold — 26%;
- Magnificent Seven stocks — 20%;
- emerging-market equities — 20%;
- S&P 500 — 12%;
- U.S. investment-grade bonds — 4%.
BlackRock links the long-term decline to the development of market infrastructure: initially, bitcoin trading was concentrated on spot crypto exchanges with relatively low liquidity. Then came perpetual futures, regulated CME contracts, options, and U.S. spot exchange-traded products.
The growth of arbitrage and hedging across these segments has deepened market liquidity and improved its capacity to absorb large capital flows. However, the trend is not one-way. Analysts acknowledge that the expansion of high-leverage perpetual futures over the past year partly offset the decline in volatility and can again amplify sharp price moves.
BlackRock manages the largest U.S. spot bitcoin exchange-traded product, the iShares Bitcoin Trust. The company earns fee income from managing the fund and is directly incentivized by investor demand for such instruments.
The document itself does not hide this conflict. On the last page, BlackRock warns about the high volatility of digital assets, the possibility of total loss, risks of hacks, large sales by holders, and shifting market sentiment.
The company also states explicitly that the research is not a forecast, investment recommendation, or an offer to buy or sell securities.
On August 11, BlackRock’s head of digital assets Robert Mitchnick said that the first cryptocurrency’s moves had begun to diverge from the stock market. In his view, this supports the case for bitcoin as a diversification tool.
