Two of the world's largest asset managers have issued reports explaining why Bitcoin's crash happened despite Wall Street's embrace of the asset. BlackRock and VanEck both point to leverage and shifting capital flows rather than a structural rejection of crypto.
BlackRock's leverage diagnosis
In a whitepaper, BlackRock attributes the crash to extreme leverage and capital rotation into AI funds. Futures open interest topped $90 billion, with 80% of that in offshore perpetual contracts offering up to 125x leverage. On October 10, 2025, new China tariffs triggered forced liquidations that wiped out $20 billion of open interest in a single day. That, BlackRock argues, was the spark.
VanEck's capitulation signals
VanEck's ChainCheck report counts 8 of 12 capitulation signals firing. The correction is now in its tenth month, versus a historical average of 11 to 13 months. VanEck expects a shallower trough than the 78% to 94% wipeouts of past cycles, because no major lender has collapsed this time. But the firm concedes that capitulation buys have historically paid off only at the one-year mark.
The money flow
Spot Bitcoin ETFs pulled in $60 billion between January 2024 and October 2025, then bled more than $5 billion while AI-themed funds absorbed $46 billion. BlackRock frames that rotation as cyclical, not a structural loss of demand. VanEck's report doesn't dispute the rotation but highlights the speed of the outflows.
Timing the bottom
Analyst Benjamin Cowen predicts an October cycle bottom, which would line up with the historical correction length. BlackRock, meanwhile, models a 1% to 2% Bitcoin allocation improving a 60/40 portfolio, suggesting the firm still sees a role for the asset.
Whether October actually marks the floor is unresolved. VanEck's own data says capitulation buying has only paid off at the one-year mark, which would push the payoff window into late 2027. For now, the two reports agree on the cause of the crash — leverage and AI rotation — but diverge on how long the pain lasts.
