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Even with its recent mini-rally, Bitcoin (CRYPTO: BTC) remains nearly 40% below its all-time high from October 2025. But that’s perfectly OK, says asset management giant BlackRock (NYSE: BLK), because the long-term investment thesis for Bitcoin remains unchanged.
If that’s the case, then is it time for investors to start buying <a href="https://www.fool.com/investing/stock-market/market-sectors/financials/cryptocurrency-stocks/bitcoin-etfs/?utm_source=yahoo-host-full&utm_medium=feed&utm_campaign=article&referring_guid=ac34ce0a-6f94-4ff6-bc64-ffee8123ed21″ rel=”nofollow noopener” target=”_blank”>Bitcoin again? Let’s take a closer look.
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The good, the bad, and the ugly about Bitcoin
According to BlackRock, Bitcoin’s steep decline can be chalked up to “idiosyncratic deleveraging and flow dynamics.”
Put another way, investors got too greedy betting on Bitcoin in the perpetual futures market, and their positions got wiped out as soon as Bitcoin began to decline in price. That’s the “idiosyncratic deleveraging” part.
At the same time, money began to move from Bitcoin to AI-themed investments as soon as the crypto market showed signs of weakness, accelerating the decline. This showed up in Bitcoin ETF outflows. Money flowed from crypto to artificial intelligence, and that’s the “flow dynamics” part.
Despite all that, says BlackRock, Bitcoin remains a global monetary alternative and a unique portfolio diversifier. In short, it can serve as a hedge against fiat currency debasement, and, due to its historically low correlations with major asset classes, it can also help to boost a portfolio’s overall diversification.
The only problem, admits BlackRock, is that Bitcoin can sometimes have a “dual personality.” It can sometimes perform like a risky asset, and it can sometimes perform like gold. So you don’t always know what you’re getting with Bitcoin. At times this year, for example, Bitcoin has performed more like a high-beta tech stock than a safe, long-term store of value.
This is a point that BlackRock also brought up in a research report that it issued last September. In it, BlackRock warned investors against thinking in terms of a purely “risk-on/risk-off” framework when it comes to Bitcoin, because it shares characteristics of both risky and non-risky assets.
Is Bitcoin now a buy?
Putting it all together, investors need to adopt a long-term mindset when it comes to Bitcoin. It is a buy-and-hold asset, not a short-term speculative trade. If you’re moving in and out of Bitcoin, trying to time the market, you’re doing it all wrong.
Source: finance.yahoo.com