Pantera Capital , a veteran crypto investment fund, recently attracted attention when Franklin Bi, the fund's General Partner , posted an article on the X platform offering his opinion on who is behind the recent sharp sell-off in the cryptocurrency market.
According to Franklin Bi, the culprit is most likely not a professional crypto trading company, but rather a large entity from Asia, operating outside the traditional crypto "circle ." Due to its limited number of crypto trading partners, this entity was not detected by the crypto community early on until liquidation pressure erupted.
The chain of events was outlined by Franklin Bi
In the post, Franklin Bi outlined a hypothetical scenario for how this entity could fall into a cycle of forced liquidation:
- Execute leveraged trades and market-making on Binance.
- Close arbitrage positions in Japanese Yen (JPY carry trade).
- Facing a severe liquidation crisis in extreme market conditions.
- A grace period of approximately 90 days was granted to address the imbalance.
- Attempts were made to "recover" losses by trading gold and silver, but without success.
- Forced liquidation of positions this week is creating strong selling pressure on the crypto market.
The above chain of events suggests that the crash did not originate purely from crypto, but rather from a ripple effect of disruption between traditional financial markets and digital assets.
Why didn't the crypto market detect this sooner?
According to Franklin Bi, the unique characteristic of this entity is:
- Not a crypto-native fund, therefore less likely to appear in familiar OTC/ on-chain relationships.
- The operation is conducted through a number of centralized partners, resulting in a Shard transaction trail.
- Pressure only becomes apparent when liquidation dries up, forcing public sell-offs.
This explains why the crypto community was caught by surprise, despite the massive scale of the sell-off. If Franklin Bi's hypothesis is correct, the recent sell-off reflects:
- Systemic risk arises from entities outside the crypto industry.
- The interconnectedness between TradFi, commodities, and crypto is growing ever deeper.
- Risk of cross-market liquidation shock as leveraged strategies are simultaneously dismantled.
This also serves as a reminder that the crypto market no longer operates in isolation, but is increasingly influenced by global Capital flows and macroeconomic strategies.
Although Franklin Bi's assessment is merely personal speculation , it opens up an important perspective: major fluctuations in the crypto market can stem from factors beyond traditional predictions, especially now that crypto has become part of the global financial ecosystem.
