Is Bitcoin Underperforming Because a Hedge Fund Blew Up? Here's the Theory
Watch on YouTube ↗  |  February 12, 2026 at 01:21 UTC  |  47:28  |  Unchained (Chopping Block)
Speakers
Laura Shin — Host
Parker White — COO and Chief Investment Officer at Defi Development Corp

Summary

  • Parker White theorizes the February 5th crypto crash was caused by the liquidation of a single large Hong Kong-based hedge fund, rather than macro fundamentals or the halving cycle.
  • The fund was likely running a "Short Volatility" strategy (shorting puts/straddles) on IBIT options and kept doubling down on losing positions from October 10th through February 5th.
  • IBIT options have become the 4th largest options market globally (behind SPY, SPX, QQQ), centralizing institutional risk and liquidity there.
  • Bitcoin's underperformance relative to Gold and Equities since October was artificial suppression caused by this fund's distress; with the fund now liquidated, that suppression is removed.
Trade Ideas
Ticker Direction Speaker Thesis Time
GOLD
WATCH Parker White
COO and Chief Investment Officer at Defi Development Corp 		"Metals are ripping, which is like the debasement trade. Like, this is supposed to be Bitcoin. What's going on?" Gold is serving as the "truth" for the macro environment (debasement/liquidity). The divergence between Gold (up) and Bitcoin (down) was the signal of a forced seller in crypto. Watching Gold continues to be the benchmark; if Gold remains strong, it confirms the macro tailwind for Bitcoin is intact now that the seller is dead. WATCH (Use as a leading indicator for BTC's recovery target). Gold prices collapsing would invalidate the "debasement trade" thesis for Bitcoin. 7:09
BTC /IBIT
LONG Parker White
COO and Chief Investment Officer at Defi Development Corp 		"I literally think this time around it's the massive growth in Bitcoin derivatives and a giant fund taking advantage of it... and it has nothing to do with... the market just deciding it's time to go down." White argues that Bitcoin's decoupling from other risk assets (like Gold and Stocks, which were "ripping") was due to a specific distressed seller defending a bad short-volatility position. Now that this fund has "blown up" and been liquidated (Feb 5th), the artificial selling pressure is gone. Bitcoin should now mean-revert and catch up to the broader "debasement trade" (Gold). LONG. If the theory is wrong and the downturn is driven by genuine macro weakness or regulatory shifts rather than a single fund's liquidation. 0:03