Hayes links Bitcoin selloff to ETF hedging

Arthur Hayes said recent declines in bitcoin prices are being intensified by institutional dealer hedging tied to structured products linked to BlackRock’s bitcoin ETF.

In a February 7 post on X, Hayes argued that falling prices force banks issuing notes linked to the iShares Bitcoin Trust to sell bitcoin as part of standard delta-hedging practices.

“I will be compiling a complete list of all issued notes by the banks to better understand trigger points that could cause rapid price rises and falls,”

Hayes wrote.

He said the process creates a feedback loop in which selling accelerates further selling, amplifying volatility even though there is no coordinated attempt to crash the market.

The comments followed bitcoin’s worst single-day performance since the November 2022 collapse of FTX, amid broader macro pressure and heightened institutional activity.

Separately, Pantera Capital general partner Franklin Bi attributed the selloff to a distressed Asia-based entity unwinding leveraged positions funded through the Japanese yen carry trade.

Together, the views suggest bitcoin’s price action is increasingly shaped by complex institutional strategies rather than retail sentiment alone.

At the time of reporting, Bitcoin price was $70,349.35.