Jeff Park recently theorized that much of the indiscriminate US-based Bitcoin selling is driven by multi-strategy hedge funds (HFs) engaged in delta-hedged or relative value/factor-neutral trades. He pointed out that these funds, which own a significant portion of Bitcoin ETFs, are facing increasing funding costs and margin requirements amid the current volatile environment.Park noted that about one-third of Bitcoin ETFs are owned by institutions, with 50% held by hedge funds. This creates fast money flows that can quickly capitulate if risk models signal distress. He mentioned that MicroStrategy (MSTR) had one of its highest turnover rates recently, a sign of the market's aggressive reaction to rising volatility.Park concluded that while this market turmoil may lead to a quick repricing of Bitcoin, it will take time to rebuild investor confidence. He emphasized that "commonholder risk" and liquidity issues are contributing to the sell-off, as hedge funds try to minimize exposure in a challenging market.
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