BlackRock Says the Long-Term Investment Thesis for Bitcoin Remains Intact. Is Bitcoin Now a Buy?
Key Points
Bitcoin's 40% price decline is likely a short-term correction rather than a long-term trend.
Historically, Bitcoin has been largely uncorrelated with any major asset class, which makes it a unique portfolio diversifier.
Bitcoin shares the characteristics of both "risk-on" and "risk-off" assets, which can make it difficult to value for investors.
- 10 stocks we like better than Bitcoin ›
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 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.
Image source: Getty Images.
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.
If you try to time the market, you'll likely miss out on sudden price increases for Bitcoin, many of which come out of seemingly nowhere. For example, just last week, Bitcoin was trading for $64,000, and some thought it would plunge below $60,000. Today, Bitcoin is trading for $77,000, and some now think it will surge all the way to $100,000.
If history is any guide, Bitcoin is nearing the end of its four-year cycle, and it could be ready to rebound once again. While investing in Bitcoin is certainly not for the faint of heart, it is the rare asset that offers a mix of upside potential and downside protection. With Bitcoin still significantly below its all-time high from last year, now could be an opportunity to build a position at a discount.
Should you buy stock in Bitcoin right now?
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Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and BlackRock. The Motley Fool has a disclosure policy.
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