Unusual trading in BlackRock’s Bitcoin ETF, iShares Bitcoin Trust (IBIT), has traders speculating that this week’s Bitcoin selloff was driven by one or more Hong Kong-based hedge funds rather than selling pressure from crypto traders.
This theory was explained by Parker White, COO and CIO of DeFi Development Corp, in a post on X, and centers around record trading and options activity in IBIT.
Bitcoin ($BTCIt fell sharply last week, down 16%, trading as high as $62,000 on Thursday, before rebounding to around $70,400 on Friday, according to CoinGecko. On Thursday, IBIT had its highest daily trading volume ever, with about $10.7 billion traded. Despite high trading volumes, IBIT recorded only $175 million in net outflows, according to SoSoValue.
White cited several signals that suggest selling pressure is not coming from crypto-native traders, including relatively few liquidations on centralized crypto exchanges and unusual price action on crypto exchanges. $BTC And Solana ($SOL).
“Considering these facts and methods, $BTC and $SOL Traded in lockstep today (normally $SOL I believe this issue is related to large IBIT holders, as the trades with Beta + liquidations on CeFi exchanges are relatively low. ” the post reads. $BTC Since they trade options, I suspect the culprit is a hedge fund that trades IBIT options. ”
White said public filings show that some funds hold a very large share of IBIT’s assets, in some cases almost all of them. He added that many of these IBIT-focused funds are based in Hong Kong and do not typically trade in cryptocurrencies, which could explain why traders failed to recognize the warning signs before the decline.
He also pointed to the activity of $DFDV, a fund associated with DeFi Development Corp, which he said recorded the worst single-day decline in history, along with a sharp drop in net asset value.
“I personally know of a number of Hong Kong-based hedge funds that are holders of $DFDV… mNAV has remained surprisingly strong through this pullback to date,” White wrote, adding that funds that manage large IBIT positions through a single entity structure are unlikely to operate only one vehicle.
White cautioned that while there was no hard evidence, “just some hunches and breadcrumbs,” he believed his theory was “very plausible.” Other experts partly agreed with White, noting that the size and structure of the move did not resemble a typical crypto-led selloff.
Rob Wallace, co-founder of BitcoinNews.com, agreed that the combination of factors White mentioned is more like an institutional sell-off than a retail panic. He also said that IBIT has become an important link between traditional markets and markets. $BTC trading.
Still, White and other traders stressed that the clearest evidence would come from regulatory filings showing large IBIT positions being reduced to zero.
