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.
The post Wall Street Backed Bitcoin, Then Watched It Crash 50%, Two Reports Explain appeared first on BeInCrypto.
Source: https://beincrypto.com/wall-street-bitcoin-crash-blackrock-vaneck/
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