Bitcoin has fallen approximately 50% from its October peak, but the world's largest asset manager maintains its long-term bullish view on the cryptocurrency, arguing that the pullback reflects leverage and weaker flows rather than a fundamental change in Bitcoin's investment case.
BlackRock, which manages the iShares Bitcoin Trust (IBIT), the largest Bitcoin exchange-traded fund by assets, says Bitcoin's 50% decline since its October high is driven by leverage unwinding and reduced inflows rather than deterioration in the asset's fundamental characteristics. The firm's position stands in contrast to the broader market sentiment that has turned increasingly bearish on Bitcoin in recent months.
Why Bitcoin Has Fallen 50%
Bitcoin peaked in October 2025 before beginning a prolonged decline that has seen the cryptocurrency lose roughly half its value, trading near $64,000 as of August 2026. Multiple factors have contributed to the decline, including rising interest rates, increasing oil prices, regulatory uncertainty, and large-scale selling by leveraged investors.
According to recent analysis, one overlooked group of sellers has added approximately $1.78 billion in selling pressure to Bitcoin markets. This selling, combined with reduced inflows from institutional investors andETF outflows, has created persistent downward pressure on the price despite Bitcoin's fundamental adoption metrics continuing to grow.
BlackRock's Long-Term Thesis
BlackRock's continued bullishness on Bitcoin is grounded in the asset's role as a portfolio diversifier and an alternative to traditional store-of-value assets like gold. The firm argues that Bitcoin's correlation with traditional assets remains low over long time horizons, making it a valuable addition to diversified portfolios even during periods of price decline.
The firm's position is significant because BlackRock manages trillions of dollars in assets and its views influence the allocation decisions of institutional investors worldwide. If BlackRock maintains its Bitcoin allocation recommendations despite the 50% drawdown, it could encourage other institutional investors to maintain or increase their positions, potentially providing a floor for Bitcoin prices. For more on Bitcoin market analysis, see our coverage of VanEck's capitulation signals.
The ETF Flow Story
Bitcoin ETFs have been a major driver of institutional adoption, with BlackRock's IBIT claiming the bulk of inflows. In a recent week, Bitcoin ETFs attracted $853 million, with IBIT claiming the majority of those inflows. This suggests that institutional demand for Bitcoin exposure through regulated vehicles remains strong despite the price decline.
However, ETF flows have been volatile, with weeks of significant inflows followed by weeks of outflows. The overall trend has been positive but not sufficient to offset the selling pressure from leveraged investors and other large sellers. The question for Bitcoin's price trajectory is whether ETF inflows will accelerate enough to absorb the ongoing selling pressure. For more on Bitcoin ETFs, see our coverage of Grayscale's ETF decisions.
What Comes Next for Bitcoin
BlackRock's long-term view is shared by other major financial institutions. VanEck has suggested that Bitcoin may enter an accumulation phase by November, with 8 of 12 capitulation signals already flashing. Goldman Sachs has said a September Fed rate hike is very unlikely, offering relief to Bitcoin bulls who have been concerned about rising interest rates.
However, near-term risks remain. Bitcoin traders face a $57,000 liquidation risk as leverage builds in the derivatives market, and surging yields and oil prices continue to drain risk appetite from cryptocurrency markets. The tension between long-term bullish fundamentals and near-term bearish market conditions will likely define Bitcoin's price action in the coming months. For more on Bitcoin markets, read our coverage of Bitcoin's liquidation risk.
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