DeutschThe recent decline in the crypto market is fueling new speculation. While many investors blame common market mechanisms, a different theory is emerging from the industry: A large institutional player who was forced to liquidate its positions could be behind the sell-off. A theory that is currently causing discussion – and shows how much the market has changed.
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The starting point for the speculation is an analysis by Parker White, CIO of Solana-specialized DeFi Development Corp. White points to conspicuous movements surrounding BlackRock’s IBIT spot Bitcoin ETF. According to his statements, the ETF recently reached a trading volume of $10.7 billion – a record value and about twice as high as the previous high. At the same time, according to White, around 900 million dollars in premiums also changed hands in the IBIT options, also a historical peak value.
Bitcoin crash: Is a ‘large ETF investor’ behind it?
Not only the volume, but also the market behavior is striking. Bitcoin and Solana fell almost synchronously at times, although Solana usually reacts more strongly to price movements. At the same time, liquidations on central crypto exchanges remained comparatively low. For White, this is an indication that the cause does not necessarily have to lie in classic crypto trading. Rather, the pressure could come from the environment of institutional products.
In his remarks, which were reported by several industry media, White speaks of the possibility that “a large ETF investor” could be behind the movement. Hedge funds that have heavily relied on IBIT options are particularly in focus. According to White, platforms such as WhaleWisdom show funds that concentrate large parts of their portfolios on a single product. Such strategies often serve to isolate collateral – with the risk that losses will escalate more quickly as soon as the market moves against the position.
The theory becomes explosive due to the geopolitical context. White points out that some of these specialized funds are based in Hong Kong. At the same time, there have recently been unusual movements in other markets: Silver temporarily lost around 20 percent in one day, while the so-called yen carry trade is increasingly dissolving. Rising financing costs could have put highly leveraged strategies under pressure. In this scenario, a hedge fund would have been forced to close positions – with direct consequences for the Bitcoin price.
13F filings from the USA could solve the puzzle
There is no evidence so far. White himself emphasizes that this is an interpretation of market data and not confirmed facts. It is only clear that the dynamics in the crypto market have shifted. Institutional products such as ETFs play an increasingly important role, which means that price movements are increasingly intertwined with classic financial markets. Indications of the actual background could emerge later. In the USA, institutional investors must disclose their positions via so-called 13F reports.
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These are published up to 45 days after the end of the quarter. If a large fund has actually failed, the traces could only become visible then. Until then, the suspicion remains that the recent Bitcoin decline had less to do with panic among retail investors than with problems behind closed doors in the big financial world. A reminder that the crypto market is no longer an isolated experiment, but part of a global financial system in which the mistakes of individual players can suddenly move entire markets. (mck)
