BlackRock and VanEck released back-to-back reports this week explaining why Wall Street’s arrival failed to prevent the 50% Bitcoin (BTC) crash. Both firms argue the same infrastructure that accelerated institutional adoption also amplified the sell-off.
BlackRock’s whitepaper blames extreme leverage and capital rotation into AI funds. VanEck’s latest ChainCheck counts 8 of 12 capitulation signals firing and suggests the correction may be entering its final months.
Leverage and Fund Flows Drove the Bitcoin Crash
BlackRock’s “Re-Underwriting Bitcoin” whitepaper describes a market that entered October 2025 dangerously stretched. Futures open interest topped $90 billion, and 80% of it sat in offshore perpetual contracts offering up to 125x leverage.
When Washington announced fresh China tariffs on October 10, forced liquidations wiped $20 billion of open interest in a single day. Equities recovered within weeks, but bitcoin kept sliding and broke below $60,000 by June.
Fund flows deepened the damage. Spot Bitcoin ETFs drew $60 billion between January 2024 and October 2025. They then bled more than $5 billion while AI-themed funds absorbed $46 billion.
BlackRock, however, frames the rotation as cyclical rather than a structural loss of demand.
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VanEck Sees the Sell-Off Entering Its Final Phase
VanEck’s mid-August ChainCheck reaches a similar verdict through on-chain data. Eight of 12 capitulation signals are active. The drawdown has also entered its 10th month, against a historical average of 11 to 13. That timeline mirrors analyst Benjamin Cowen’s call for an October cycle bottom.
The firm also expects a shallower trough than the 78% to 94% wipeouts of past cycles because no major lender has collapsed this time.
“We expect a shallower trough this cycle, and we would rather state that assumption plainly than hide it inside a threshold,” The VanEck research team, led by Head of Digital Assets Research Matthew Sigel, wrote in the report.
Meanwhile, with on-chain researchers arguing the market has entered an accumulation zone, neither firm, BlackRock nor VanEck, promises a quick rebound.
BlackRock still models a 1% to 2% allocation improving a 60/40 portfolio. VanEck, meanwhile, concedes capitulation buys have historically paid off only at the one-year mark.
The next few months will test whether Wall Street’s Bitcoin era can soften the bottom it could not prevent.