Bitcoin (BTC) skilled on of the largest sell-offs over the previous month, sliding greater than 40% to succeed in a year-to-date low of $59,930 on Friday. It’s now down over 50% from its October 2025 all-time excessive close to $126,200.
Key takeaways:
-
Analysts are pointing to Hong Kong hedge funds and ETF-linked U.S. financial institution merchandise as potential drivers of BTC’s crash.
-
Bitcoin may slip again under $60,000, placing the value nearer to miners’ break-even ranges.
Hong Kong hedge funds behind BTC dump?
One common idea means that Bitcoin’s crash this previous week might have originated in Asia, the place some Hong Kong hedge funds had been putting substantial, leveraged bets that BTC would proceed to rise.
These funds used choices linked to Bitcoin ETFs like BlackRock’s IBIT and paid for these bets by borrowing low-cost Japanese yen, based on Parker White, COO and CIO of Nasdaq-listed DeFi Improvement Corp. (DFDV).
They swapped that yen into different currencies and invested in dangerous property like crypto, hoping costs would rise.
This was the very best quantity day on $IBIT, ever, by an element of almost 2x, buying and selling $10.7B at this time. Moreover, roughly $900M in choices premiums had been traded at this time, additionally the very best ever for IBIT. Given these information and the way in which $BTC and $SOL traded down in lockstep at this time (usually…
— Parker (@TheOtherParker_) February 6, 2026
When Bitcoin stopped going up, and yen borrowing prices elevated, these leveraged bets shortly went dangerous. Lenders then demanded more money, forcing the funds to promote Bitcoin and different property shortly, which exacerbated the value drop.
Morgan Stanley precipitated Bitcoin selloff: Arthur Hayes
One other idea gaining traction comes from former BitMEX CEO Arthur Hayes.
He advised that banks, together with Morgan Stanley, might have been pressured to promote Bitcoin (or associated property) to hedge their publicity in structured notes tied to identify Bitcoin ETFs, similar to BlackRock’s IBIT.
These are complicated monetary merchandise the place banks provide shoppers bets on Bitcoin’s worth efficiency (usually with principal safety or limitations).
When Bitcoin falls sharply, breaching key ranges like round $78,700 in a single famous Morgan Stanley product, sellers should delta-hedge by promoting underlying BTC or futures.
This creates “destructive gamma,” which means that as costs drop additional, hedging gross sales speed up, turning banks from liquidity suppliers into pressured sellers and exacerbating the downturn.
Miners shifting from Bitcoin to AI
Much less distinguished however circulating is the speculation {that a} so-called “mining exodus” might have additionally fueled the Bitcoin downtrend.
In a Saturday put up on X, analyst Choose Gibson mentioned that the rising AI information heart demand is already forcing Bitcoin miners to pivot, which has led to a 10-40% drop in hash price.
For example, in December 2025, Bitcoin miner Riot Platforms introduced its shift towards a broader information heart technique, whereas promoting $161 million value of BTC. Final week, one other miner, IREN, introduced its pivot to AI information facilities.
Associated: Crypto’s stress check hits steadiness sheets as Bitcoin, Ether collapse
In the meantime, the Hash Ribbons indicator additionally flashed a warning: the 30-day hash-rate common has slipped under the 60-day, a destructive inversion that traditionally alerts acute miner earnings stress and raises the danger of capitulation.
As of Saturday, the estimated common electrical energy value to mine a single Bitcoin was round $58,160, whereas the web manufacturing expenditure was roughly $72,700.
If Bitcoin drops again under $60,000, miners may begin to expertise actual monetary stress.
Lengthy-term holders are additionally trying extra cautious.
Information exhibits wallets holding 10 to 10,000 BTC now management their smallest share of provide in 9 months, suggesting this group has been trimming publicity reasonably than accumulating.
This text doesn’t include funding recommendation or suggestions. Each funding and buying and selling transfer includes danger, and readers ought to conduct their very own analysis when making a call. Whereas we try to supply correct and well timed data, Cointelegraph doesn’t assure the accuracy, completeness, or reliability of any data on this article. This text might include forward-looking statements which might be topic to dangers and uncertainties. Cointelegraph won’t be answerable for any loss or injury arising out of your reliance on this data.
