From $10.7 Billion in Trading Volume to BTC Plunge: Unveiling the Potential "Liquidation Chain" Behind IBIT
Without a black swan event, Bitcoin suddenly plummeted, and the market is searching for the cause. Market data shows that BTC and SOL fell almost simultaneously, but the liquidation volume on-chain and centralized exchanges wasn't actually that dramatic. This is interesting, suggesting that the selling pressure might not be coming from typical crypto capital players.
I happened to see an analysis by Parker White of DeFi Dev Corp, which I found quite insightful. He said that yesterday, the trading volume of BlackRock's IBIT spot ETF surged to $10.7 billion, almost double the previous record, while the options premium also soared to $900 million, both all-time highs. Data doesn't lie; such unusual activity usually corresponds to some kind of large-scale position change.
He speculated that this volatility might have originated from one or two hedge funds with extremely high holdings in IBIT, possibly located in Hong Kong. Some of these funds even hold IBIT as a single asset to isolate margin risk. The problem lies in leverage. Silver prices have plummeted these past few days, and yen carry trades are being liquidated at an accelerated pace. The pressure from the macroeconomic environment has hit these funds' leveraged positions hardest. To recoup losses or potentially gain profits, they may have engaged in highly leveraged options trading. However, the market didn't play by the script, and the Bitcoin drop could very well have directly breached their position limits.
I think the repercussions of this are twofold. First, there's the lag in information disclosure. According to 13F reporting regulations, we won't see specific institutional holding details until mid-May. This means that for nearly three months, the market will be pieced together from speculation and fragmented data, and uncertainty will persist. Second, it exposes a typical risk of a new phase: traditional capital, entering through compliant instruments like spot ETFs, is still playing the leverage game, but the risk transmission path has changed. Previously, liquidations mainly occurred on-chain or on CeFi platforms; now, they may be hidden behind ETF derivatives trading, making them more covert and harder to monitor in real time.
From a broader perspective, this shows that the coupling between the crypto market and traditional macroeconomics is no longer what it used to be. A single fund might simultaneously trade yen carry trades, commodities, and Bitcoin ETFs. Any slight movement in any of these markets could trigger a chain reaction of liquidations across assets. This is no longer an isolated incident like the Three Arrows of 2022; crypto assets are now more deeply embedded in the global capital liquidity network.
Looking ahead, I believe such events could drive two changes. First, regulators might scrutinize the leverage used in ETF-related derivatives more closely, as this is essentially playing a high-risk game within a "compliance shell," easily accumulating unseen risks. Second, institutional risk control models will likely need upgrading—using traditional methods to assess the correlation of crypto assets, especially under extreme macroeconomic volatility, is likely to fail.
Yesterday's volatility was like a stress test, not of the Bitcoin network itself, but of the robustness of this new approach of "traditional institutions + compliant products + complex derivative strategies." The data is there; now we'll see how many similar positions are hidden beneath the surface.
#btc #etf #IBIT
