Traders suggest unusual activity in IBIT may point to Hong Kong–based hedge funds, though no hard evidence has emerged.
Unusual trading in BlackRock’s bitcoin ETF, iShares Bitcoin Trust (IBIT), has led traders to speculate that this week’s sharp Bitcoin drop may have been triggered by one or more Hong Kong–based hedge funds, rather than selling pressure from crypto traders.
The theory was laid out in a post on X by Parker White, the COO and CIO of DeFi Development Corp, and centers around record trading and options activity in IBIT.
Bitcoin (BTC) fell sharply over the past week, dropping 16%, and trading as low as $62,000 on Thursday before rebounding to around $70,400 on Friday, per CoinGecko. On Thursday, IBIT recorded its highest daily trading volume to date, with about $10.7 billion traded. Despite the heavy volume, IBIT recorded only $175 million in net outflows, according to SoSoValue.
White cited several signals suggesting that selling pressure did not come from crypto-native traders, including relatively low liquidations on centralized crypto exchanges and unusual price action in BTC and Solana (SOL).
“Given these facts and the way $BTC and $SOL traded down in lockstep today (normally SOL trades with beta) + the relatively lower liquidations on CeFi exchanges, this leads me to believe that the nexus of the problem lies with a large IBIT holder,” the post reads. “IBIT has become the #1 venue for BTC options trading, so my guess is that a hedge fund trading IBIT options is the culprit.”
White said public filings show that some funds hold a very large share (and in some cases nearly all) of their assets in IBIT. He added that many of those IBIT-focused funds are based in Hong Kong and do not normally trade crypto, which could explain why traders didn’t see warning signs ahead of the selloff.
He also pointed to activity in $DFDV, a fund tied to DeFi Development Corp, which he said posted its worst single-day decline on record, alongside a sharp drop in its net asset value.
“I personally know a number of HK-based hedge funds that are holders of $DFDV… the mNAV had been holding steady surprisingly well throughout this pull back until today.” White wrote, adding that he finds it unlikely a fund running a large IBIT position through a single-entity structure would operate only one vehicle.
White cautioned that while he has no hard evidence, “just some hunches and bread crumbs,” he believes his theory seems “very plausible.” Other experts echoed parts of White’s view, noting that the size and structure of the move did not resemble a typical crypto-driven selloff.
Rob Wallace, co-founder of BitcoinNews.com, agreed that the combination of factors mentioned by White looks more like institutional selling than a retail panic. He also said IBIT has become an important link between traditional markets and BTC trading.
Still, White and other traders emphasized that the clearest confirmation would come from regulatory filings showing a large IBIT position being reduced to zero.
