Bitcoin has ‘largely purged’ froth that preceded 50% drop from $126K: BlackRock
Summary
BlackRock says Bitcoin’s more than 50% drop from its $126,200 high was a positioning correction, not a breakdown in its long-term thesis. It links the selloff to excessive leverage in derivatives, cascading liquidations, and weaker ETF/treasury demand. Despite recent outflows from IBIT and other spot Bitcoin ETFs, BlackRock expects Bitcoin’s correlation with risk assets to fall as speculative excess clears. It argues Bitcoin has repeatedly rebounded after major shocks, often outperforming equities and gold over subsequent weeks or months. The firm still sees Bitcoin as a low-correlation diversifier with a role similar to gold: a hedge against inflation, global instability, and fiat currency weakness.
