The crypto market went through another round of wild swings in early February after Bitcoin suddenly plunged to the low-$60,000s<\/a> in just a few hours on Feb. 5, dragging the rest of the market down with it, before bouncing back to near $70,000.<\/p>\n As of Monday morning, the largest cryptocurrency by market cap is trading around $68,860, down 3.2% in the past 24-hours and almost 12% over the past seven days.<\/p>\n Data from Coinglass shows<\/a> more than $2 billion in leveraged crypto positions were liquidated in that short window on Thursday, mostly made up of long bets forced to close as prices fell. That wave of automatic selling pushed the slide further than fundamentals alone would suggest.<\/p>\n Jeff Park, a Bitwise portfolio manager, suggested<\/a> on X on Thursday evening that a lot of the indiscriminate selling seemed to come from multi-strategy hedge funds running delta-hedged trades \u201cpossibly with growth equity correlations spillovers.\u201d<\/p>\n Parker White, chief investment officer at DeFi Development Corporation, wrote in an X post several hours after Park that the market crash was probably triggered by the sudden collapse of Hong Kong hedge funds, as The Defiant previously reported<\/a>. <\/p>\n Those funds held call options in IBIT, BlackRock\u2019s spot Bitcoin exchange-traded fund<\/a> and one of the largest in the market, which saw about $10.7 billion in trading that day \u2014 nearly double its previous record \u2014 with roughly $900 million in options premiums changing hands.<\/p>\n White suggested that Asia-based hedge funds had run a leveraged IBIT options trade funded in yen, added more leverage after losses, got hit by funding costs and silver trades, and then the final Bitcoin move triggered the collapse.<\/p>\n \u201cWe know that Asian traders, particularly in China, have been deeply involved in the Silver and Gold trade. Silver was down 20% today, which was the 2nd largest 1 day move in a very long time (largest on Jan 30). We also know that the JPY carry trade has been unwinding at an increasingly rapid pace,\u201d White wrote.<\/p>\n But if the liquidation actually happened, it won\u2019t show up in 13F filings \u2014 quarterly reports that disclose institutional holdings \u2014 until 45 days after the quarter ends, so mid\u2011May is the earliest the full picture could emerge.<\/p>\n Tanisha Katara, founder of Katara Consulting Group, echoed the sentiment, noting in commentary for The Defiant that institutional products like ETFs can accelerate both rallies and sell-offs. <\/p>\n She noted that U.S. spot Bitcoin ETFs, which provide streamlined access to the crypto market for large financial players, are now also net sellers, showing that having a way in doesn\u2019t guarantee long-term commitment. Katara told The Defiant:<\/p>\n \u201cThe digital gold narrative has been conclusively debunked by this cycle. Like Gold is up 72% while Bitcoin is down 28% over the same period. What’s left is the infrastructure thesis: stablecoins, tokenisation, DeFi primitives, governance systems, and programmable money.\u201d<\/p><\/blockquote>\n<\/figure>\n Adding to the chaos, South Korea\u2019s Bithumb mistakenly gave away thousands of BTC during a promotion, briefly sparking heavy local selling, though the exact amount of dumped tokens remains unclear.<\/p>\nHello from Hong Kong<\/h2>\n
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