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Bitcoin Selloff Sparks Hedge Fund Speculation Around BlackRock ETF

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Bitcoin Selloff Sparks Hedge Fund Speculation Around BlackRock ETF

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.

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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.

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“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.

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Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday

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Oil prices jumped more than 3% on Monday, pushing Brent crude above $116 a barrel. West Texas Intermediate (WTI), the US benchmark, climbed to roughly $102 per barrel.

The latest rise comes as the US-Israel war on Iran entered its fifth week with no signs of abating.

Oil Extends Its War-Fueled Rally 

Several escalatory developments over the weekend fueled the surge. President Donald Trump told the Financial Times he could possibly seize Kharg Island, the terminal that handles roughly 90% of Iran’s crude exports.

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The US president struck a mixed tone on diplomacy with Iran, saying he was “pretty sure” of making a deal with Iran but conceding that talks could still collapse.

Meanwhile, Iran’s parliament speaker warned that Tehran would “set them on fire” when American forces arrived and promised consequences for US-allied nations in the region. 

The oil price surge is far from over, according to market analysts, who warn that the prolonged closure of the Strait of Hormuz could drive crude even higher.

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“A scenario in which the Strait remains closed for an additional month would be consistent with oil prices rising towards $150/bbl and constraints on industrial consumers of energy supply,” Bruce Kasman, global head of economics at JPMorgan, said.

According to Bloomberg, US officials and Wall Street analysts have also begun discussing the possibility of crude reaching $200 per barrel.

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Asian Stocks Tumble, Crypto Feels the Pressure

The energy shock rippled across Asia. Google Finance data showed that Japan’s Nikkei 225 fell over 4.5%, while South Korea’s KOSPI dropped more than 4.3% as import-dependent economies repriced risk.

The volatility has spread to crypto markets, with asset prices dipping early in the morning before rebounding. 

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“The market briefly crashed just now — ETH dropped below $1,940 and BTC fell below $65,000,” Lookonchain reported.

Oil above $100 per barrel continues to pressure risk assets by fueling inflation expectations and delaying anticipated Federal Reserve rate cuts.

The post Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday appeared first on BeInCrypto.

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Lido DAO Mulls $20M LDO Buyback to Boost Token Price

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Lido DAO Mulls $20M LDO Buyback to Boost Token Price

Lido’s decentralized autonomous organization is considering a one-off $20 million buyback of its governance token to address so-called price dislocation, which is at “historically depressed levels” relative to Ether, according to the DAO. 

The proposal, submitted Friday, seeks permission to swap 10,000 Lido Staked Ether (stETH) tokens, currently worth $20 million from the DAO’s treasury for Lido DAO (LDO), arguing that LDO is undervalued.

“This is not a routine fluctuation. It represents one of the most significant dislocations between LDO’s market price and its underlying protocol fundamentals in the token’s history.”

A token buyback of this size could boost the price of the token, which has fallen roughly 96% from its all-time high. In November, a Lido DAO member pitched an automated buyback mechanism for LDO to improve the token’s price. However, that proposal hasn’t been implemented.

LDO’s change in price relative to ETH since 2024. Source: Lido DAO

Lido DAO pointed out that LDO is trading at a steep discount to Ether (ETH) at a ratio of 0.00016, roughly 63% below its two-year median.

This is despite the protocol holding the top spot of the Ethereum liquid staking market, with a 23.2% share of staked Ether, according to Dune Analytics data. The protocol’s dominance has even been flagged as a centralization risk to the network in previous years.

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Share of Ethereum network validators. Source: Dune Analytics

Related: Ethereum builders propose ‘economic zone’ to tackle L2 fragmentation 

LDO is currently trading at $0.30, down 95.9% from its $7.30 high set in August 2021, according to CoinGecko data. LDO’s $255 million market cap makes it the 141st largest token by value at the time of writing.

“That dislocation is not justified by a proportional deterioration in protocol performance,” Lido DAO said. 

Lido DAO proposes buying stETH in batches

Lido DAO proposed buying up to 10,000 stETH in smaller batches of 1,000 to buy LDO. 

Lido DAO said it would use limit orders or adopt a dollar-cost averaging strategy to avoid market volatility. 

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