Bitcoin Rebounds 18 Percent as BlackRock Keeps Long Term Thesis

BlackRock says the Bitcoin investment case remains intact after a 53% fall from the October 2025 record, arguing that leverage and changing investment flows drove much of the decline. Bitcoin has also recovered sharply in recent days, climbing about 18% from the August 14 low.

Good to Know

• Bitcoin fell from a record $124,606 in October 2025 to $58,642 in June 2026, a 53% decline.
• Bitcoin traded near $62,600 on August 14 before climbing to about $73,823 on August 21, a rebound of roughly 18%.
• BlackRock research found that a 1% to 2% Bitcoin allocation historically improved risk-adjusted returns in a traditional 60/40 portfolio.

BlackRock Blames Leverage Rather Than a Broken Bitcoin Thesis

BlackRock views the Bitcoin crash from $124,606 to $58,642 as a positioning correction rather than evidence that the long-term case for BTC has changed.

“We view the sell-off as a function of idiosyncratic deleveraging and flow dynamics, and believe Bitcoin’s core investment case as an important emerging global monetary alternative and unique portfolio diversifier remains unchanged.”

Leverage had reached extreme levels before the sell-off. Bitcoin futures open interest exceeded $90 billion in early October 2025, with around 80% sitting outside CME in perpetual futures. Some venues offered leverage of 50 to 125 times.

A US tariff announcement involving China on October 10 then hit risk assets. Bitcoin dropped 6% that day, while open interest fell by $20 billion, the largest one-day reduction in the BlackRock dataset. Further liquidation waves followed in February and June 2026.

Fund flows added another drag. Spot Bitcoin ETPs attracted about $60 billion from January 2024 through September 2025, but recorded roughly $5 billion of outflows from October 2025 through July 2026. AI themed funds attracted more than $46 billion during that later period. BlackRock argues that competition for investor capital slowed the Bitcoin recovery.

Bitcoin Rebounds Nearly 18 Percent From August Low

Recent price action has already reversed part of the decline.

Bitcoin traded around $65,000 on August 8 before falling to an August 14 low of about $62,596, a pullback of roughly 3.6%. It then climbed to about $73,823 on August 21, putting BTC around 18% above that August low and almost 26% above the June cycle low of $58,642.

Reuters reported that Bitcoin had gained around 17% over the latest week as investors bought alternative assets amid concern over US government debt, Treasury policy and the dollar. Bitcoin also jumped around 5% on August 20 alone.

BlackRock still sees diversification as the main portfolio argument. The asset manager said Bitcoin has maintained low long-term correlation with traditional assets despite periods when deleveraging temporarily pushed correlation higher.

Volatility has also declined over the past decade as Bitcoin market infrastructure matured, although leveraged perpetual futures increased short-term volatility during the latest cycle.

“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. With speculative excess now largely purged, we believe bitcoin’s recent episodes of elevated risk correlation should normalize lower, consistent with its longer-term record as a low-correlation diversifier.”

BlackRock updated 10-year analysis found that a 1% to 2% Bitcoin allocation would historically have improved risk-adjusted returns in a 60% stock and 40% bond portfolio. The firm also cautions that larger allocations quickly increase overall portfolio risk.