Crypto Advisor

one working theory that i have is that a lot of this indiscriminate US-based selling is coming from multi-strat HFs that are delta-hedged or running some kind of RV/factor neutral trades that are widening, possibly with growth equity correlations spillovers- the rough math is that 1/3 of Bitcoin ETFs is owned by institutional types, and about 50% is considered to be hedge funds (maybe more). that's a decent amount of fast money flows that can capitulate if the cost of funding or margin requirements tick up on heightened vol environment like now where risk managers intervene, esp if the basis yield is not worth the risk premium. worth noting MSTR $ turnover was one of the highest today in its history. thats why the biggest factor that puts HFs out of business is the notorious 'commonholder risk' which results in all downside correlation to one. to sell when liquidity is as poor as it is is the typical 'shut risk down' behavior were seeing today. we'll see this in eventual ETF flows if thats true and when this all clears, i suspect we'll reprice pretty quickly though it will still take some time to build confidence thereafter