Crypto: What Crashed Bitcoin? Three Theories Behind Btc's Trip Below $60k

Hong Kong hedge funds’ leveraged BTC price bets are emerging as the main trigger behind Bitcoin’s sharp month-long sell-off.

Bitcoin (BTC) experienced on of the biggest sell-offs over the past month, sliding more than 40% to reach a year-to-date low of $59,930 on Friday. It is now down over 50% from its October 2025 all-time high near $126,200.

Analysts are pointing to Hong Kong hedge funds and ETF-linked U.S. bank products as possible drivers of BTC’s crash.

Bitcoin could slip back below $60,000, putting the price closer to miners’ break-even levels.

One popular theory suggests that Bitcoin’s crash this past week may have originated in Asia, where some Hong Kong hedge funds were placing substantial, leveraged bets that BTC would continue to rise.

These funds used options linked to Bitcoin ETFs like BlackRock’s IBIT and paid for those bets by borrowing cheap Japanese yen, according to Parker White, COO and CIO of Nasdaq-listed DeFi Development Corp. (DFDV).

They swapped that yen into other currencies and invested in risky assets like crypto, hoping prices would rise.

This was the highest volume day on $IBIT, ever, 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…

When Bitcoin stopped going up, and yen borrowing costs increased, those leveraged bets quickly went bad. Lenders then demanded more cash, forcing the funds to sell Bitcoin and other assets quickly, which exacerbated the price drop.

Another theory gaining traction comes from former BitMEX CEO Arthur Hayes.

Source: CoinTelegraph