An analysis suggests the recent sharp drop in bitcoin may have been driven not by traditional cryptocurrency traders but by options trading by Hong Kong hedge funds centred on BlackRock's bitcoin ETF, IBIT.

According to a Defiant report, Parker White, chief operating officer and chief investment officer at DeFi Development Corp, shared that view on the social platform X on the 9th.

White said that with bitcoin and solana falling in tandem and liquidations on centralised exchanges remaining small, it was not a typical internal crypto selloff. He said IBIT now plays the biggest role in bitcoin options trading and raised the possibility that there was large-scale hedge fund selling centred on the product.

Bitcoin fell about 16 percent this week to $62,000 before rebounding to around $70,400 as of Friday. IBIT logged a record daily trading volume of $10.7 billion the same day, but net outflows totalled only $175 million. The small net outflow relative to trading volume is also cited as a sign of "options-driven selling".

White analysed that some Hong Kong-based funds hold most of their assets concentrated in IBIT and may not be familiar with cryptocurrency trading, which could have kept sell signals from being exposed externally. He added that the fund he runs, $DFDV, also posted its biggest ever daily drop and said it was highly likely that multiple funds with similar structures exist.

He maintained a cautious stance, saying there was no clear evidence but that a series of circumstances and inferences was persuasive.