Wall Street Backed Bitcoin, Then Watched It Crash 50%, Two Reports Explain
BlackRock and VanEck launched back-to-back stories this week explaining why Wall Street’s arrival failed to stop the 50% Bitcoin (BTC) crash. Both corporations argue the identical infrastructure that accelerated institutional adoption additionally amplified the sell-off.
BlackRock’s whitepaper blames excessive leverage and capital rotation into AI funds. VanEck’s newest ChainCheck counts 8 of 12 capitulation indicators firing and suggests the correction could also be getting into its last 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 curiosity topped $90 billion, and 80% of it sat in offshore perpetual contracts providing as much as 125x leverage.
When Washington introduced recent China tariffs on October 10, pressured liquidations wiped $20 billion of open curiosity in a single day. Equities recovered inside weeks, however bitcoin saved sliding and broke beneath $60,000 by June.
Fund flows deepened the injury. Spot Bitcoin ETFs drew $60 billion between January 2024 and October 2025. They then bled greater than $5 billion whereas AI-themed funds absorbed $46 billion.
BlackRock, nonetheless, frames the rotation as cyclical quite than a structural lack of demand.
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VanEck Sees the Sell-Off Entering Its Final Phase
VanEck’s mid-August ChainCheck reaches an analogous verdict by way of on-chain information. Eight of 12 capitulation indicators are energetic. The drawdown has additionally entered its tenth month, towards a historic common of 11 to 13. That timeline mirrors analyst Benjamin Cowen’s name for an October cycle bottom.
The agency additionally expects a shallower trough than the 78% to 94% wipeouts of previous cycles as a result of no main lender has collapsed this time.
“We count on a shallower trough this cycle, and we’d quite state that assumption plainly than conceal it inside a threshold,” The VanEck analysis crew, led by Head of Digital Assets Research Matthew Sigel, wrote within the report.
Meanwhile, with on-chain researchers arguing the market has entered an accumulation zone, neither agency, BlackRock nor VanEck, guarantees a fast rebound.
BlackRock still models a 1% to 2% allocation bettering a 60/40 portfolio. VanEck, in the meantime, concedes capitulation buys have traditionally paid off solely on the one-year mark.
The subsequent few months will check whether or not Wall Street’s Bitcoin period can soften the underside it couldn’t forestall.
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