TechFlow reports that, according to Fortune, on February 7, Bitcoin’s price plunged nearly $15,000 within 24 hours—the steepest drop since the FTX collapse in 2022. Bitcoin has since rebounded to approximately $70,000.
Parker White, COO of DeFi Development Corporation—a Solana-based treasury company listed on U.S. stock exchanges—offered an explanation: Hong Kong hedge funds employed yen-based carry trades to establish highly leveraged positions in over-the-counter (OTC) options for BlackRock’s Bitcoin exchange-traded fund (IBIT), betting on a Bitcoin price rebound. However, the anticipated rebound failed to materialize, while rising yen funding costs and volatility in the silver market further exacerbated these funds’ difficulties.
White noted that these Hong Kong funds primarily trade Bitcoin via ETFs and operate outside the traditional crypto ecosystem; thus, their distress has not sparked discussion on “Crypto Twitter.” Other contributing factors to this week’s market crash may include selloffs in AI-related assets, regulatory uncertainty surrounding blockchain legislation, and the appearance of cryptocurrency-related names in the Epstein documents.
Venture capitalist Haseeb Qureshi considers this theory plausible but notes it may take months for regulatory filings to confirm it.
