The firm’s August 2026 research report characterizes the decline as a liquidity-driven event. Data shows that offshore perpetual contracts, which offered leverage as high as 125 times, amplified volatility. This buildup of over $90 billion in futures open interest left the market vulnerable to cascading liquidations, particularly following geopolitical shifts like the U.S. tariff announcements against China in late 2025.
In section Cryptocurrency
BlackRock Maintains Long-Term Bitcoin Thesis Despite 50% Correction
Bitcoin’s sharp retreat from its October 2025 peak has wiped out more than half of its value, yet BlackRock remains committed to its long-term outlook. The asset manager argues that the recent market turbulence stems from excessive leverage and shifting capital flows rather than a fundamental flaw in the asset’s core properties.
Institutional capital patterns have also shifted. While spot Bitcoin ETPs saw $60 billion in inflows through October 2025, they subsequently recorded $5 billion in outflows. BlackRock suggests this capital rotated into AI-themed funds, which captured $46 billion during the same period. Corporate treasury activity further pressured supply, with firms like MARA and Strategy liquidating holdings to bolster reserves or repurchase shares. Despite these headwinds, BlackRock maintains that a 1% to 2% allocation to Bitcoin historically improves risk-adjusted returns in a 60/40 portfolio, citing its capped supply and low correlation with the S&P 500 as enduring strengths.
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