What crashed Bitcoin? Three theories behind BTC's trip below $60K

Bitcoin (BTC) experienced connected of the biggest sell-offs implicit the past month, sliding much than 40% to scope a year-to-date debased of $59,930 connected Friday. It is present down implicit 50% from its October 2025 all-time precocious adjacent $126,200.

Key takeaways:

• Analysts are pointing to Hong Kong hedge funds and ETF-linked U.S. slope products arsenic imaginable drivers of BTC’s crash.

• Bitcoin could gaffe backmost beneath $60,000, putting the terms person to miners’ break-even levels.

BTC/USD regular terms chart. Source: TradingView

Hong Kong hedge funds down BTC dump?

One fashionable mentation suggests that Bitcoin’s clang this past week whitethorn person originated successful Asia, wherever immoderate Hong Kong hedge funds were placing substantial, leveraged bets that BTC would proceed to rise.

These funds utilized options linked to Bitcoin ETFs similar BlackRock’s IBIT and paid for those bets by borrowing cheap Japanese yen, according to Parker White, COO and CIO of Nasdaq-listed DeFi Development Corp. (DFDV).

They swapped that yen into different currencies and invested successful risky assets similar crypto, hoping prices would rise.

This was the highest measurement time connected $IBIT, ever, by a origin of astir 2x, trading $10.7B today. Additionally, astir $900M successful options premiums were traded today, besides the highest ever for IBIT. Given these facts and the mode $BTC and $SOL traded down successful lockstep contiguous (normally…

When Bitcoin stopped going up, and yen borrowing costs increased, those leveraged bets rapidly went bad. Lenders past demanded much cash, forcing the funds to merchantability Bitcoin and different assets quickly, which exacerbated the terms drop.

Morgan Stanley caused Bitcoin selloff: Arthur Hayes

Another mentation gaining traction comes from erstwhile BitMEX CEO Arthur Hayes.

He suggested that banks, including Morgan Stanley, whitethorn person been forced to merchantability Bitcoin (or related assets) to hedge their vulnerability successful structured notes tied to spot Bitcoin ETFs, specified arsenic BlackRock's IBIT.

Source: X

These are analyzable fiscal products wherever banks connection clients bets connected Bitcoin's terms show (often with main extortion oregon barriers).

When Bitcoin falls sharply, breaching cardinal levels similar astir $78,700 successful 1 noted Morgan Stanley product, dealers indispensable delta-hedge by selling underlying BTC oregon futures.

This creates “negative gamma,” meaning that arsenic prices driblet further, hedging income accelerate, turning banks from liquidity providers into forced sellers and exacerbating the downturn.

Miners shifting from Bitcoin to AI

Less salient but circulating is the mentation that a alleged “mining exodus” whitethorn person besides fueled the Bitcoin downtrend.

In a Saturday post connected X, expert Judge Gibson said that the increasing AI information halfway request is already forcing Bitcoin miners to pivot, which has led to a 10-40% driblet successful hash rate.

Source: X

For instance, successful December 2025, Bitcoin miner Riot Platforms announced its displacement toward a broader information halfway strategy, portion selling $161 cardinal worthy of BTC. Last week, different miner, IREN, announced its pivot to AI information centers.

Related: Crypto’s accent trial hits equilibrium sheets arsenic Bitcoin, Ether collapse

Meanwhile, the Hash Ribbons indicator besides flashed a warning: the 30-day hash-rate mean has slipped beneath the 60-day, a antagonistic inversion that historically signals acute miner income accent and raises the hazard of capitulation.

BTC Hash Riboon vs. price. Source: Glassnode

As of Saturday, the estimated mean energy outgo to excavation a azygous Bitcoin was astir $58,160, portion the nett accumulation expenditure was astir $72,700.

BTC/USD regular illustration vs. accumulation and electrical cost. Source: Capriole Investments

If Bitcoin drops backmost beneath $60,000, miners could commencement to acquisition existent fiscal stress.

Long-term holders are besides looking much cautious.

Data shows wallets holding 10 to 10,000 BTC present power their smallest stock of proviso successful 9 months, suggesting this radical has been trimming vulnerability alternatively than accumulating.