The cryptocurrency market saw a major drop recently, with Bitcoin leading the way.
The cryptocurrency market saw a major drop recently, with Bitcoin leading the way.
Fred Krueger, a notable figure in the investment community, led to analyze the cause of this sudden drop, proposing a complicated theory.
Was the massive bet counterproductive?
According to Krueger, a large fund was involved in a risky trading strategy that involved shorting MicroStrategy (MSTR) stock and simultaneously buying Bitcoin (BTC), with a staggering $1 billion allocated to each side of the trade. .
Their strategy backfired last Friday when the fund was forced to close, leading to the sale of $1 billion worth of Bitcoin.
This sell-off reportedly triggered further sell-offs in the market, compounded by sales by smaller investors, colloquially referred to as “shrimp, crabs and fish.”
As Guru-Investingreported, MicroStrategy, a Virginia-based enterprise software company known for its significant Bitcoin holdings, has surprisingly surpassed Amazon in trading volume.
This surge was part of a broader trend of growing enthusiasm in the Bitcoin complex, which now boasts more than $20 billion in daily trading volume.
Skepticism and current state of Bitcoin
Krueger’s analysis sheds light on a possible catalyst for Bitcoin’s recent decline, but not everyone in the crypto community is convinced.
A post by Josh Olszewicz, a prominent analyst and former head of research at Valkyrie Investments, questioned the viability of the trading strategy described by Krueger. He suggested that such an operation would likely have failed before the events of last Friday.
Amid this debate, Bitcoin price has shown little resistance and is currently trading just above the $66,000 level.
Earlier this week, the flagship coin hit a new all-time high of $73,000.
