BlackRock Sees Bitcoin's 50% Price Drop as a 'Reset' Not a 'Breakdown'

BlackRock's latest research report suggests that Bitcoin's 50% price drop from its October 2025 all-time high near $125,000 was not a breakdown in the cryptocurrency's fundamental investment case, but rather a correction driven by overleveraged positioning and flow rotation.

The report, titled 'Re-Underwriting Bitcoin,' attributes the selloff to a single catalyst on October 10, 2025, when U.S. tariff announcements against China hit global markets.

At that point, bitcoin futures open interest had ballooned to over $90 billion, with 80% concentrated in offshore perpetual futures offering leverage as high as 125x.

The resulting liquidation cascade wiped $20 billion in open interest in a single day, the largest on record, driving prices down to cycle lows below $60,000 per bitcoin by June 2026.