Investor Identifies Unique Reason for Bitcoin (BTC) Crash
In recent days, the cryptocurrency market has witnessed a significant decline, with Bitcoin leading the way.
A well-known figure in the investment community, Fred Krueger, has provided a unique analysis on X, explaining the cause behind this sudden crash with a complex theory.
Did a massive bet backfire?
Krueger suggests that a large fund implemented a risky trading strategy involving shorting MicroStrategy (MSTR) stock while simultaneously purchasing Bitcoin (BTC), with an astounding $1 billion allocated to each side of the trade.
Unfortunately, this strategy went awry when the fund was compelled to stop out, resulting in the sale of $1 billion worth of Bitcoin.
Allegedly, this massive sell-off triggered a subsequent series of liquidations in the market, compounded by sales from smaller investors playfully referred to as “shrimp, crabs, and fish.”
As previously reported by U.Today, MicroStrategy, a Virginia-based enterprise software company renowned for its substantial Bitcoin holdings, surprisingly surpassed Amazon in terms of trading volume.
This surge found its place amidst a broader trend of growing enthusiasm in the equitized Bitcoin complex, which currently boasts a daily trading volume exceeding $20 billion.
Skepticism and the current state of Bitcoin
Krueger’s analysis sheds light on a potential catalyst for Bitcoin’s recent crash, but not all members of the cryptocurrency community are convinced.
A post from Josh Olszewicz, a prominent analyst and former head of research at Valkyrie Investments, questions the viability of the trading strategy outlined by Krueger, suggesting that such a trade would have likely failed prior to the events of last Friday.
Amidst this debate, Bitcoin’s price has demonstrated little resilience, currently hovering just above the $66,000 level.
Earlier this week, the flagship coin reached a new all-time high of $73,000.