Arthur Hayes Attributes Bitcoin Crash to ETF-Linked Dealer Hedging

Arthur Hayes, co-founder of BitMEX, asserted that institutional dealer hedging, specifically linked to structured financial products like BlackRock’s iShares Bitcoin Trust (IBIT), is exacerbating the recent decline in Bitcoin prices. He explained that when Bitcoin prices fall, financial institutions issuing these notes must sell the underlying asset to manage risk exposure (delta hedging), especially when principal-protection levels are triggered. Hayes noted this creates a feedback loop accelerating the price collapse, although he clarified there is no "secret plot" and that derivatives merely amplify existing volatility in both directions. He expressed gratitude that bailouts are absent, allowing leveraged tourists to be cleared out swiftly. This analysis contrasts with other market participants who attribute the volatility to macroeconomic headwinds or distressed non-crypto entities engaging in leveraged strategies.

(Source：BeInCrypto)