Several X accounts have reignited a long-running debate in bitcoin circles, 
arguing that a single onchain bitcoin now underpins multiple financial claims 
across exchange-traded funds (ETFs), futures, perpetual swaps, wrapped tokens, 
and structured products. The argument, often labeled the “paper bitcoin” 
theory, draws direct comparisons to gold’s financialization in the 1980s, when 
derivatives came to […]

Why Some Traders Say Bitcoin’s 21 Million Cap Is Being Diluted Off-Chain

Arthur Hayes, co‑founder of BitMEX, has pointed to hedging tied to BlackRock’s 
iShares Bitcoin Trust (IBIT) as a major driver behind the recent Bitcoin 
sell‑off. Related Reading: Bitcoin Edges Past Gold In Appeal, JPMorgan Says 
According to Hayes, dealer hedging related to IBIT and similar structured 
products can force large, mechanical selling when markets move against those 
positions. Reports note that such moves can amplify a price drop already set 
off by other pressures. Heavy Hedges Can Trigger Sudden Selling Pressure: 
Hayes Hayes argues that banks and dealers who underwrite structured notes and 
ETF‑linked products often hedge their exposure in the spot and derivatives 
markets. Those hedges can be heavy and fast. When a large product faces 
outflows or redemption triggers, hedges are adjusted quickly. That can 
translate into sudden selling pressure that pushes prices down further, 
especially if liquidity is thin. $BTC dump probably due to dealer hedging off 
the back of $IBIT structured products. I will be compiling a complete list of 
all issued notes by the banks to better understand trigger points that could 
cause rapid price rises and falls. As the game changes, u must as well. 
pic.twitter.com/9DF8VE9XBL — Arthur Hayes (@CryptoHayes) February 7, 2026 
Market Moves And Liquidity Stress The market behaved like a room of people 
trying to leave at once. Prices plunged, then bounced. Reports say Bitcoin 
fell steeply from its recent highs before staging a partial recovery. Bitcoin 
has fallen to around $68,500 Saturday, down 16% in the last seven days, data 
from Coingecko shows. Trades and order books showed spikes in volume, which is 
one sign that hedging flows and quick rebalancing were at play. Some analysts 
say macro news and trader positioning also mattered. The truth likely sits in 
the overlap of these causes. Who Bears The Risk Dealers carry risk when they 
underwrite complex products. In certain moments, that risk is passed back into 
the market through hedging. That’s how, according to Hayes, a few large 
issuers can indirectly set off a chain reaction that affects many other 
holders and traders. The moves can be sudden and mechanical, not always driven 
by sentiment. A Watchful Washington Reports say the role of spot ETFs in 
crypto markets is now on regulators’ and policymakers’ radar. US President 
Donald Trump’s economic team has been monitoring big flows into and out of 
institutional vehicles, while market participants debate whether ETFs 
stabilize prices or add new stress points. Whatever the view, structured 
products now form a clear link between traditional finance and crypto 
volatility. Broader Takeaways This episode underlines how new financial 
plumbing can create new channels for contagion. Some see the presence of 
large, regulated players as a net positive for long‑term adoption. Others warn 
those same players introduce conventional market mechanics that can behave 
unpredictably when stretched. Reports note both perspectives are useful when 
piecing together why prices moved the way they did. Related Reading: Bitcoin 
Sell-Off May Be Done, Analyst Flags Recovery Signs Who Is Right, And What Next 
Hayes has laid out a theory that ties observable hedging flows to the crash. 
It is a compelling thread that fits many of the market signals seen in recent 
days. Still, other factors—macro shifts, concentrated profit‑taking, and 
liquidity gaps—likely played parts as well. Traders will watch flows closely, 
and structured product issuers will be asked hard questions. Featured image 
from Unsplash, chart from TradingView

Bitcoin Crash Linked To BlackRock IBIT Hedging, Arthur Hayes Claims

Bitcoin ETFs recorded $330.67 million in net inflows on February 6, ending a 
three-day outflow streak that drained $1.25 billion from products. BlackRock&#8217;s 
IBIT led with $231.62 million in inflows. At the same time, Ark &amp; 21Shares&#8217; 
ARKB has brought…

Bitcoin ETFs witness $330 million in inflow as BTC price dumps again

Reports detail that Vietnam’s Ministry of Finance has floated a draft circular 
that would pull cryptocurrency trading firmly into the tax net, proposing a 
securities-style framework that levies a flat 0.1% personal income tax on 
every crypto transfer while exempting the activity from value-added tax. 
Vietnam’s Crypto Market Pilot Adds 0.1% Personal Income Tax Under […]

Report: Vietnam Proposes 0.1% Crypto Transaction Tax Under Securities-Style Rules

XRP price is slowly forming a giant hammer candlestick pattern, pointing to an 
eventual rebound, as Ripple prepares the launch of its permissioned DEX 
features to the network. Ripple (XRP) token was trading at $1.4120, up by 25% 
above its…

Cryptocurrency price in PHP