Bitcoin Down 50% From Its Peak: BlackRock Sticks to Its Strategy

Bitcoin lost more than 50% between its October 2025 record and its June low. However, BlackRock does not change its position. In a new report dedicated to BTC, the world’s largest asset manager maintains an allocation of 1 to 2% in a traditional portfolio. For them, the drop mainly comes from leverage, institutional outflows, and sales by large holders. Not from a change in the Bitcoin case.

Bitcoin keeps its place at BlackRock

BlackRock has long defended an allocation of 1 to 2% in bitcoin. The recent months’ decline does not change this recommendation. The group updated its calculations over ten years. In a classic portfolio composed of 60% stocks and 40% bonds, this small exposure to bitcoin would have improved risk-adjusted returns.

BlackRock suggests taking this allocation from the equity portion. A 60/40 portfolio can therefore become slightly less exposed to equities and allocate 1 or 2% to Bitcoin.

No more than that. Caution remains important since bitcoin still displays volatility significantly higher than the main traditional asset classes. BlackRock therefore does not present bitcoin as the core of a portfolio. The group rather considers it as a complementary asset that can bring a different source of return. Even after a drop by half.

The drop mainly comes from leverage

Bitcoin had exceeded 120,000 dollars in October 2025. Open interest on futures contracts then exceeded 90 billion dollars. The market was loaded. On October 10, new trade tensions between the United States and China triggered a wave of sales. In one day, about 20 billion dollars of open interest on bitcoin disappeared.

Other liquidations followed in February and then in June 2026. Bitcoin finally fell below 60,000 dollars. Institutions also slowed. Between January 2024 and October 2025, Bitcoin spot ETPs had attracted about 60 billion dollars. Since October, BlackRock calculates more than 5 billion outflows.

Money went elsewhere. Funds linked to artificial intelligence received more than 46 billion dollars over the same period. Some investors simply changed their theme. Large holders also sold. Miners, old wallets, and companies with Bitcoin treasuries added supply to the market.

Strategy even sold 32 BTC in June. A tiny amount compared to its stock but unusual for a company known for accumulating. Despite outflows, BlackRock still observes strong institutional demand for Bitcoin and Ethereum. Demand has slowed. It has not disappeared.

BlackRock does not change its thesis

BlackRock continues to present bitcoin as a global monetary alternative and a possible tool against currency depreciation. The group also highlights its low long-term correlation with stocks.

Over ten years, bitcoin’s correlation with the S&P 500 reaches 0.18. That of gold is around 0.06. However, BTC’s behavior varies greatly in the short term. During certain liquidation phases, Bitcoin falls with stocks. During some geopolitical episodes, it can instead act like a hedging asset.

BlackRock talks about “double personality.” The manager also believes Bitcoin’s volatility has decreased over the last decade with the development of derivative markets and listed products. Leverage on perpetual contracts can still cause serious accidents.

October gave a good example. Since then, speculative positioning has significantly decreased. Perpetual contract funding rates even briefly became negative in the second quarter.

Flows also begin to return at times. At the end of July, BlackRock’s Bitcoin ETF alone had again delivered a positive session on American funds. BlackRock therefore promises no quick return to the peaks. Their message boils down to a fairly small allocation. Bitcoin has lost more than half its value. BlackRock keeps its 1 to 2%.