The real reason for the Bitcoin crash? This theory is currently going viral
- Krypto-X discusses whether the Bitcoin crash was triggered by a possible IBIT options blow-up.
- Parker White points to IBIT records for volume and option premiums as well as eye-catching 13F structures, but there will be no hard evidence until mid-May at the earliest.
Yesterday (February 5th) the Bitcoin price fell to around 62,354 US dollars over the course of the day; Individual exchanges such as Binance have even registered a wick of up to $60,000. This means that Bitcoin is roughly 30 percent below the level at the beginning of January (at that time just under $94,000) and around 48 percent below the record high from October 2025 at around $126,273.
There is currently a lot of discussion about the reasons: the Binance flash crash on October 10th, market makers that went bankrupt, the 4-year cycle, sales by OG whales and most recently the nomination of Kevin Warsh as the new US Central Bank Chairman by US President Donald Trump.
Is this the real reason for the Bitcoin crash?
Today, however, the crash got a new theory that is currently going viral on Krypto-X: It is not primarily retail panic or classic stock market liquidations that are said to have been the deciding factor, but rather a possible blow-up surrounding BlackRock’s Bitcoin ETF IBIT via the options market.
The speculation is triggered by an unusual mix of market signals. Parker White, Chief Investment Officer of DeFi Dev Corp (DFDV), points to a record day at IBIT:
“This was IBIT’s highest volume day ever – by almost a factor of 2 – with $10.7 billion in trading volume. Additionally, approximately $900 million in options premium was traded, also the highest IBIT has ever seen.”
This was the highest volume day on $ GOever, by a factor of nearly 2x, trading $10.7B today. Additionally, roughly $900M in options premiums were traded today, also the highest ever for IBIT. Given these facts and the way $BTC and $SOL traded down in lockstep today (normally…
— Parker (@TheOtherParker_) February 6, 2026
At the same time, Bitcoin and Solana fell “in lockstep,” while liquidations on centralized crypto exchanges remained comparatively moderate, an indication for White that the pressure did not come from the traditional crypto market.
His thesis: A large IBIT holder may have gotten into trouble, possibly a hedge fund that was leveraged through IBIT options. White argues that IBIT is now “the most important trading venue for Bitcoin options” and has thus established a leverage channel that is not necessarily visible in the usual crypto derivatives data.
Another component of his theory are the holder structures, which are made public quarterly from the 13F reports to the US Securities and Exchange Commission. White writes that there are funds there whose portfolio consists largely of IBIT – in some cases even 100 percent.
“This most likely suggests no cross-margin. The biggest reason to set up a fund that only holds a single asset would be to isolate the margin – so that brokers don’t have access to other assets in the event of a blow-up.”
It is also striking that “most of these large single-asset funds” are based in Hong Kong. White points out that Asian traders, particularly in China, were heavily involved in the massive rise in gold and silver trading prices. Silver lost 20 percent that day – one of the largest daily moves ever. In addition, the unwinding of the yen carry trade has accelerated.
The interaction suggests to him that “one or more Hong Kong-based, non-crypto-native hedge funds” could be at the center. The fact that these actors operate outside the crypto-native network would explain why no one still knows if and who went bankrupt.
White adds an indication from his environment: he knows several Hong Kong funds that hold DFDV. His company had the “worst day ever,” including a noticeable decline in mNAV. His conclusion: Anyone who is big enough to leverage IBIT in a single-entity construct is unlikely to operate just a single vehicle.
What could such a blow-up look like technically? White outlines a scenario in which a fund traded “leveraged options trades” on IBIT, such as calls with high gamma exposure – possibly financed with yen capital. An earlier shock (he mentions October 10th) may have left a hole in the balance sheet, which they tried to close with more leverage on an “obvious” recovery.
Rising financing costs and a failed silver trade then escalated the situation until “this final push in Bitcoin” drew the line. However, White emphasizes:
“I don’t have any hard evidence here, just some gut feelings and breadcrumbs.”
At the same time, a second point is causing new controversy: White finds it “suspicious” that the Nasdaq applied to the SEC to quickly lift contract limits for options contracts on large Bitcoin and Ether ETFs and that the SEC agreed. The limits were removed on January 21st and Bitcoin fell “cliff-like” on January 29th. His pointed diagnosis: With IBIT, the leverage capacity has become “far greater” than anywhere else in the crypto market – “Crypto has finally got our own nuclear leverage weapon.”
It is not clear whether these were forced sales – but that is exactly where the warning from CryptoQuant CEO Ki Young Ju comes in. “If this isn’t forced selling, it’s hard to understand why institutions would dump so much supply at once,” he writes. What is critical is that forced selling in Bitcoin tends to cascade:
“The scary thing about forced Bitcoin sales is their chain reaction. As funds liquidate and prices fall, miners go bankrupt, and even retail investors who held out until the end are forced to realize their losses.”
Unless this is forced selling, it is hard to see institutions unloading this much supply all at once.
The scary part of forced selling in Bitcoin is that it tends to cascade. As funds get liquidated and prices fall, miners go bankrupt, and even retail investors who held on until… https://t.co/VXAIH5a3fL
— Ki Young Ju (@ki_young_ju) February 6, 2026
For White, the proof lies in the coming quarterly reports: If a large, suitably structured fund had reduced an IBIT position from “huge”, that would be hard evidence for his theory. Because of the reporting deadlines, he doesn’t expect clarity until mid-May at the earliest.
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