Why Wall Street Could Not Stop Bitcoin From Crashing 50%

Wall Street heavyweights BlackRock and VanEck just released new reports explaining why Bitcoin suffered a brutal fifty percent correction despite heavy institutional backing. Both firms point out that the exact financial tools and market structures that brought big money into crypto also made the sell off much worse.

BlackRock states in its recent whitepaper that the market was way too overextended back in October. Futures open interest topped ninety billion dollars, with most of it sitting in risky offshore contracts offering massive leverage. When political news sparked sudden market panic, billions in open interest vanished in a single day. At the same time, investors pulled billions out of spot Bitcoin funds and moved that cash into artificial intelligence stocks instead.

Meanwhile, on chain data from VanEck shows that eight out of twelve major capitulation signals are currently flashing. The correction is now in its tenth month, which aligns with historical timelines for market bottoms. Analysts at VanEck expect this downturn to be shallower than past cycles because no major crypto lenders have collapsed this time around.

Neither firm is promising an immediate rebound, but both maintain a long term positive outlook. BlackRock still recommends small crypto allocations for standard portfolios, while VanEck notes that historical buying opportunities usually pay off around the one year mark of a correction. Traders should keep an eye on fund flows and broader economic conditions over the coming months to spot the final accumulation phase.