Park pointed to data from Goldman Sachs’ prime brokerage desk showing Feb. 4 ranked among the worst daily performance events on record for multi-strategy hedge funds, registering a 3.5 z-score event. “It was catastrophic,” Park wrote, adding that such episodes typically prompt risk managers to demand rapid, indiscriminate de-grossing across portfolios, which likely spilled into Feb. 5 trading.
FAQ What caused bitcoin’s Feb. 5 sell-off?Jeff Park believes it stemmed from TradFi deleveraging and ETF-related hedging, not crypto-native selling. Did investors exit Bitcoin ETFs on Feb. 5?No, Park reported net creations across spot bitcoin ETFs despite the price drop. Why did options activity matter?Park said put-heavy positioning and short-gamma dynamics forced dealers to sell into weakness. What explains bitcoin’s rebound on Feb. 6?Park pointed to the return of CME basis trades and market-neutral positioning after leverage was reduced.Why Bitcoin Fell on Feb. 5: Procap Executive Points to ETF Mechanics, Not Crypto Panic
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