Bitcoin has ‘largely purged’ froth that preceded 50% drop from $126K: BlackRock

Bitcoin (BTC) falling more than 50% from its $126,200 all-time high was a “positioning correction,” BlackRock says.

Key points:

• A BlackRock report attributes Bitcoin’s decline below $60,000 to cascading liquidations as leverage was purged from the market.
• The long-term BTC investment thesis as a “low-correlation diversifier” remains intact, analysts confirm.
• BlackRock sees Bitcoin’s risk-asset correlation declining as time goes on.

BlackRock predicts falling correlation of BTC with risk assets

In a report published this week, the world’s largest asset manager preserved its bull thesis despite waves of outflows from its spot Bitcoin exchange-traded fund (ETF) in 2026.

BlackRock’s iShares Bitcoin Trust (IBIT) saw net outflows of $78.9 million in the week through Aug. 14. Across all ETF products, outflows totaled $267.2 million.

“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,” the report states.

US spot Bitcoin ETF netflows (screenshot). Source: Farside Investors