Bitcoin's drop of more than 50% from its October 2025 all-time high is not a collapse of the investment thesis, but a natural positioning correction. This conclusion follows from my analysis of an updated ten-year study by the largest asset manager, which maintains a positive outlook on the role of the first cryptocurrency in portfolios.
Deleveraging after a record rally
After the lows of late 2022, bitcoin demonstrated an impressive rise of roughly 700%, peaking in October 2025. However, by early June 2026, the price had pulled back below $60,000. The key trigger was a wave of forced liquidations. Total open interest in bitcoin futures exceeded $90 billion by October 2025, with about 80% concentrated in perpetual contracts with leverage of up to 50–125x. When the U.S. imposed additional tariffs against China, it sparked a synchronized sell-off: the S&P 500 and Nasdaq lost 3–4%, bitcoin 6%, and Ethereum 11%. Open interest in the first cryptocurrency collapsed by $20 billion in a single day — the largest one-day drop in the history of observations.
Competition with AI funds
The second significant pressure factor was the slowdown in institutional demand. From January 2024 to autumn 2025, spot bitcoin ETFs attracted about $60 billion, but after the October reversal, outflows began — roughly $5 billion through July 2026. In parallel, there was explosive growth in interest in funds with exposure to artificial intelligence: from October 2025 to July 2026, they attracted more than $46 billion versus $10 billion over the previous 21 months. This is a clear capital rotation, although I emphasize: the AI Thematic category includes a wide range of instruments — from semiconductor ETFs to index funds — so there was no direct movement of $46 billion specifically out of bitcoin.
The Strategy factor and market behavior
Special attention deserves the episode with Strategy. A test sale of 32 BTC (about $2.5 million) in late May 2026, amounting to only 0.004% of their position, triggered a price drop to $70,000. This is more a signal of changing investor attitudes toward companies financing cryptocurrency purchases through share issuance, rather than a direct cause of the crash. Later, Strategy acknowledged the possibility of selling bitcoins for share buybacks, which heightened nervousness.
Dual nature and volatility
My analysis confirms: bitcoin exhibits a "dual nature." During mass deleveraging, its correlation with risk assets rises sharply, but over a long horizon, the ten-year correlation with the S&P 500 is only 0.18 — comparable to gold (0.06) and significantly lower than that of emerging market equities (0.57). After the reduction in leverage, signs of divergence appeared: funding rates on perpetual futures turned negative, indicating a cleansing of speculators from the market.
Bitcoin's volatility has declined from 100% ten years ago to 40% as of late June 2026, although it is still higher than gold (26%) and the S&P 500 (12%). Infrastructure development — from CME futures to spot ETFs — has deepened liquidity, but the high-leverage perpetual contract market remains a source of risk.
My comment: The key takeaway from this report is that the correction is structural, not fundamental in nature. The market has cleared excess leverage, and we are now witnessing the formation of a healthier base. However, investors should remember: the rotation into AI is not a temporary trend but a long-term competitor for capital, and bitcoin will have to prove its unique value as a diversification tool under new conditions.