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Over the past few weeks, bitcoin and the longer tail of crypto assets have experienced a sharp pullback, materially outpacing more modest corrections seen in broader markets.
After reaching its all-time high of $126K in early October, bitcoin fell as low as $84k or ~33%.1 The recent price action cannot be attributed to a single headline event or catalyst. Instead, in our view, it reflects a confluence of loosely connected factors and evolving market structure dynamics:
Shift in Fed Outlook: Expectations for slower Fed rate cuts have pushed real yields higher. For context, in October the market was pricing in a ~30% chance of one rate cut or fewer. As of early December, markets are pricing about a 46% chance of one rate cut or fewer by the March 2026 Fed meeting.2 While bitcoin’s fundamentals are largely detached from traditional economic drivers or country-specific risks, bitcoin has historically shown sensitivity to USD real rates, similar to gold and emerging-market currencies. The latest dip, on Nov. 30, occurred during a low-liquidity holiday weekend evening in the U.S.
Unwind of Excessive Leverage: Heavy use of leveraged perpetual futures in cryptoasset trading amplified short-term speculation and appears to have precipitated a “flash crash” on Oct. 10, when an initial price drop triggered automated forced liquidation of long positions, adding substantial selling pressure and setting off a chain effect that ultimately erased over 30% of futures open interest3. Lingering aftereffects of this leverage-driven sell-off persist, contributing to an overhang in the market.
Whales Rebalancing: For a substantial cohort of long-time bitcoin holders (many with cost bases of <$1k, “Whales”), $100K represented a key psychological milestone and implicit portfolio rebalancing trigger. We observe that crossing this threshold prompted some investors with concentrated exposure begin reducing overly concentrated bitcoin positions, thereby adding incremental selling pressure to the market.
Unwind of Digital Asset Treasury Optimism: Shares of digital asset treasury companies (DATs) have sold off sharply QTD and now predominantly trade near or below the NAV of the bitcoin holdings. The large premiums that spurred a flurry of new listings earlier this year have vanished, removing a source of buying pressure and raising questions of whether some treasury companies will conduct asset sales to bring their share prices back to NAV.
Bitcoin performance following ≥25 % corrections in the last 10 years2
* 1Y forward period only partially complete, as of Nov. 30, 2025
Source: Bloomberg Bitcoin Spot Price and BlackRock calculations, as of Nov. 30, 2025. Measured from the date at which the drawdown first breached 25%. Length measured from peak to trough in weeks. Spot price performance does not represent actual Fund performance. For actual fund performance, please visit www.iShares.com or www.blackrock.com. Past performance does not guarantee future results.
What does all of this mean for investors considering an allocation to bitcoin? While short-term direction is difficult to predict, drawdowns have historically provided attractive long-term entry points. Market corrections tend to curb excesses, with recent liquidations removing significant leverage from the crypto ecosystem, bringing speculative positioning back to more sustainable levels.
Looking ahead, we believe bitcoin’s long-term fundamental drivers appear intact – institutional adoption, regulatory maturation, and rising global concerns around sovereign debt levels and geopolitical fragmentation continue to support bitcoin’s investment case.
In our view, the path forward in 2026 is likely to be driven in large part by liquidity conditions in the U.S. and other major economies – i.e., the pace of rate cuts – and by the trajectory of Institutional and Wealth Advisory adoption, which has trended steadily upward since the U.S. bitcoin ETPs first launched in January 2024.
As always with bitcoin and crypto, a volatile journey is likely to be part of the equation, in either direction, we have seen two other drawdowns greater than 25% since the launch of the iShares Bitcoin Trust ETF (IBIT), and following each of the drawdowns was a strong recovery reaching new highs.
The iShares Bitcoin Trust ETF is not an investment company registered under the Investment Company Act of 1940, and therefore is not subject to the same regulatory requirements as mutual funds or ETFs registered under the Investment Company Act of 1940.
Since IBIT’s launch in January 2024, bitcoin has seen two other ≥25% pullbacks, each of which was followed by a recovery and subsequent rally
Source: Bloomberg Bitcoin Spot Price and BlackRock calculations, as of Nov. 30, 2025. The iShares Bitcoin Trust ETF (IBIT) launched on January 5, 2024. Spot price performance does not reflect actual Fund performance. For actual fund performance, please visit www.ishares.com or www.blackrock.com. Past performance does not guarantee future results.
In times of volatility, it’s important to take a step back and remember the role that bitcoin exposure can play in a portfolio. Bitcoin’s nature as a fixed supply, non-sovereign, decentralized global asset has caused some investors to consider it as an option in times of fear and around certain geopolitically disruptive events. In fact, bitcoin has played the role of a fixed supply asset in BlackRock’s model portfolios with the model portfolio managers noting their belief that bitcoin has long-term investment merit for certain investors and can potentially provide unique and additive sources of diversification to portfolios, read more here.
Robbie Mitchnick
Head of BlackRock’s Digital Assets Business
Matt Kunke
Digital Asset Strategist
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1. Bloomberg Bitcoin Spot Price and BlackRock calculations, as of Nov. 30, 2025.
2. FedWatch-CME Group & FRED- using data from 12/2/2025 & 10/10/2025.
3. Open interest refers to the total number of outstanding contacts that have not been settled or closed
4. 1Y forward period (January 2025) only partially complete
This information must be accompanied or preceded by a current iShares Bitcoin Trust ETF prospectus. Please read the prospectuses carefully before investing.
Investing involves a high degree of risk, including possible loss of principal. An investment in the Trust is not suitable for all investors, may be deemed speculative and is not intended as a complete investment program. An investment in Shares should be considered only by persons who can bear the risk of total loss associated with an investment in the Trust.
Investing in digital assets involves significant risks due to their extreme price volatility and the potential for loss, theft, or compromise of private keys. The value of the shares is closely tied to acceptance, industry developments, and governance changes, making them susceptible to market sentiment. Digital assets represent a new and rapidly evolving industry, and the value of the Shares depends on their acceptance. Changes in the governance of a digital asset network may not receive sufficient support from users and miners, which may negatively affect that digital asset network’s ability to grow and respond to challenges Investing in the Trust comes with risks that could impact the Trust’s share value, including large-scale sales by major investors, security threats like breaches and hacking, negative sentiment among speculators, and competition from central bank digital currencies and financial initiatives using blockchain technology. A disruption of the internet or a digital asset network would affect the ability to transfer digital assets and, consequently, would impact their value. There can be no assurance that security procedures designed to protect the Trust’s assets will actually work as designed or prove to be successful in safeguarding the Trust’s assets against all possible sources of theft, loss or damage.
Shares of the Trust are not deposits or other obligations of or guaranteed by BlackRock, Inc., and its affiliates, and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency. The sponsor of the trust is iShares Delaware Trust Sponsor LLC (the “Sponsor”). BlackRock Investments, LLC (“BRIL”), assists in the promotion of the Trust. The Sponsor and BRIL are affiliates of BlackRock, Inc.
This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change.
The BlackRock model portfolios are provided for illustrative and educational purposes only. The BlackRock model portfolios do not constitute research, are not personalized investment advice or an investment recommendation from BlackRock to any client of a third party financial professional, and are intended for use only by a third party financial professional, with other information, as a resource to help build a portfolio or as an input in the development of investment advice for its own clients. The BlackRock model portfolios themselves are not funds.
BlackRock intends to allocate all or a significant percentage of the BlackRock model portfolios to funds for which it and/or its affiliates serve as investment manager and/or are compensated for services provided to the funds (“BlackRock Affiliated Funds”). Clients will indirectly bear fund expenses relating to assets allocated to funds, including BlackRock Affiliated Funds. BlackRock has an incentive to (a) select BlackRock Affiliated Funds and (b) select BlackRock Affiliated Funds with higher fees over BlackRock Affiliated Funds with lower fees.
Diversification and asset allocation may not protect against market risk or loss of principal. Buying and selling shares of ETPs may result in brokerage commissions.
This material contains general information only and does not take into account an individual’s financial circumstances. This information should not be relied upon as a primary basis for an investment decision. Rather, an assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial professional before making an investment decision.
Prepared by BlackRock Investments, LLC, member FINRA.
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