Recently, there was a notable decline in the cryptocurrency market, with Bitcoin leading the way.
Renowned investing expert Fred Krueger took to X to examine the reason for this abrupt decline and offered a convoluted argument.
Did massive bet backfire?
Krueger claims that a sizable fund was involved in a high-risk trading technique in which it shorted MicroStrategy (MSTR) shares and concurrently purchased Bitcoin (BTC), allocating an astounding $1 billion to either side of the transaction.
When the fund was obliged to pull out last Friday, his plan failed and $1 billion worth of Bitcoin was sold.
This large sell-off is said to have caused more market liquidations, which were exacerbated by sales by smaller investors—also known as “shrimp, crabs and fish.”
According to U.Today, MicroStrategy, an enterprise software business located in Virginia that is well-known for having large holdings of Bitcoin, has unexpectedly overtaken Amazon in terms of trade volume.
This increase in interest was a part of a larger trend in the equitized Bitcoin complex, which currently sees over $20 billion in daily trading volume.
Skepticism and Bitcoin’s current state
Although Krueger’s study suggests a potential cause for the recent decline in Bitcoin, not all members of the cryptocurrency community agree.
In an article, well-known analyst and former head of research at Valkyrie Investments Josh Olszewicz questioned the practicality of Krueger’s trading technique. He said that before last Friday’s developments, such a move would have probably failed.
Bitcoin’s price has not held up well during this controversy; it is presently trading little above $66,000.
The flagship coin shot up to a new all-time high of $73,000 earlier this week.
