How options on the BlackRock bitcoin ETF may have worsened crypto meltdown
CoinDesk • • business
Key Points:
- BlackRock's spot Bitcoin ETF (IBIT) saw record options activity during a sharp 13% price drop, with options volume hitting 2.33 million contracts and $900 million in premiums paid—the highest single-day total ever for IBIT options.
- The surge in put option volume indicated heightened demand for downside protection amid the sell-off, reflecting typical investor behavior during market declines.
- Market analyst Parker suggested the record activity stemmed from a hedge fund blowup that heavily invested in IBIT call options using borrowed money, leading to forced liquidations and massive selling pressure.
- Options expert Tony Stewart disputed the hedge fund blowup theory, attributing the record premiums mainly to traders buying back put options to cut losses, characterizing
