Bitcoin's drop of more than 50% from its all-time high is not a collapse of the investment thesis, but a harsh reckoning for overheated leverage and a shift in institutional investors' priorities. Analysts at the world's largest asset management firm reached this conclusion, while maintaining a positive view of the first cryptocurrency's role in long-term portfolios.
My analysis of the situation confirms: we are witnessing a classic pattern of a mature market, where the speculative bubble deflates under the pressure of macroeconomic shocks, but the asset's fundamental base remains intact.
Deleveraging after the record
Bitcoin's recovery from the lows of late 2022 was impressive: a rise of roughly 700% to the October 2025 peak. However, by June 2026, the price had pulled back below $60,000. The key trigger was the U.S. imposition of additional tariffs against China, which sparked a global sell-off in risk assets. While the S&P 500 and Nasdaq lost 3–4%, bitcoin fell 6%, and Ethereum dropped 11%.
The most telling development was the collapse in open interest in bitcoin futures. The aggregate figure exceeded $90 billion, with about 80% in perpetual contracts with leverage of up to 50–125x. In a single day, the market lost roughly $20 billion in open interest—the largest one-day decline on record. This is pure forced liquidation of overheated positions, not a flight from the asset.
Investors shifted to AI
The second source of pressure is slowing institutional demand. Spot bitcoin ETFs attracted about $60 billion from January 2024 to autumn 2025, but then until July 2026, roughly $5 billion flowed out of the category. Meanwhile, funds with exposure to artificial intelligence raised more than $46 billion over the same period—versus $10 billion previously.
It is important to understand: the AI Thematic category is interpreted broadly, including semiconductor and index funds. There was no direct shift of $46 billion from bitcoin into AI, but the competition for institutional capital is obvious. In my view, this is not a rotation "out of bitcoin," but a reallocation of "free" money that might otherwise have gone into crypto assets.
Strategy and market signals
A separate source of pressure is the changing attitude toward companies holding bitcoin on their balance sheets. Strategy, which holds about 4% of the maximum supply, conducted a test sale of 32 BTC in late May 2026. The amount is trivial—$2.5 million, about 0.004% of its position—but the market reacted instantly: the asset fell to $70,000. Later, the company updated its capital allocation rules, allowing sales for share buybacks. The psychological effect here matters more than the numbers.
The dual nature of bitcoin
Despite the correction, the long-term picture remains constructive. Bitcoin's average ten-year correlation with the S&P 500 is just 0.18—versus 0.57 for emerging market equities and 0.69 for high-yield bonds. Short-term correlation spikes during deleveraging are an episodic phenomenon, not a structural trend. After the massive reduction in leverage, funding rates on perpetual futures turned negative, indicating the market has been cleansed of speculators.
Bitcoin's realized 12-month volatility has fallen to 40%—still higher than gold (26%) and the S&P 500 (12%), but the trend is clear. Infrastructure development—from CME futures to spot ETFs—has deepened liquidity, although the high-leverage perpetual contract market continues to add turbulence.
My conclusion: the current correction is a painful but necessary cleansing process. Bitcoin has passed a stress test of macroeconomic shock and institutional rotation, preserving its key diversifier characteristics. However, investors should remember: as long as the perpetual futures market dominates, sharp moves will recur. The question is not whether bitcoin will fall again, but who will end up on the other side of the liquidations.