BlackRock: Bitcoin's Investment Case Remains Strong Despite Price Decline

BlackRock's research has found that Bitcoin's investment case remains strong despite its recent decline. According to the report, speculative positioning and excessive leverage led to a 50% drop in Bitcoin's price from its highs.

The researchers identified three key events: a liquidation cascade in October 2025, which wiped out $20 billion from Bitcoin open interest; another wave of liquidations in February; and a third in June. These episodes, they argue, contributed to Bitcoin's temporarily elevated correlation with stocks.

However, BlackRock's analysis also suggests that at other times, such as during the aftermath of the U.S.-Iran conflict, Bitcoin has displayed its ability to act as a macro hedge. The report concludes that correction represents a 'positioning correction rather than a change in its investment case.'

The research paper found that allocating just 1% to 2% of a traditional 60/40 portfolio to Bitcoin would have improved risk-adjusted returns while maintaining comparable portfolio risk characteristics.