「IBIT Hedge Fund Blowup Triggers Bitcoin Crash」 Speculation Continues to Swirl, with Dragonfly Partners and Others Believing Speculation Is Reasonable

BlockBeats News, February 6th: DeFi Dev Corp's Chief Investment Officer and Chief Operating Officer Parker White today speculated that "BTC's major drop may be due to the forced liquidation of IBIT hedge fund leveraged options, with a large-scale liquidation likely to be disclosed soon."

The overseas crypto community generally holds a partially affirmative attitude towards this speculation. Dragonfly Partner Haseeb stated that the remark is "a more reasonable explanation of what happened in the market." The market needs to wait for relevant documents three months later to validate whether this assumption is correct.

CryptoQuant CEO Ki Young Ju, on the other hand, said it is hard to imagine institutions selling such a large amount of stocks at once unless they are forced to liquidate. The terrifying aspect of Bitcoin's forced liquidation is that it often triggers a chain reaction. As funds are liquidated, prices fall, miners go bankrupt, and even the last remaining retail investors are forced to stop losses. If the stock price does not see a substantial rebound at the current level within the next month, the risk of institutional structural and chain liquidation will significantly increase. Once institutional investors sell at the bottom, they are unlikely to come back. Rebuilding trust takes a long time.