Analyst Kyle Chasse concluded that Bitcoin fell not because of US President Donald Trump's tariff policy, but because of the closure of arbitration deals.
According to the data, $1,9 billion was withdrawn from the Bitcoin market over the past week, which caused a double-digit percentage drop in the coin's price. In addition, there was a significant decrease in open interest in the asset on the Chicago Mercantile Exchange, as hedge funds close their positions, ending their cash-and-carry strategy.
He noted that cash-and-carry is a low-risk arbitrage strategy that hedge funds have used to make profits. It involves buying both bitcoin ETF from BlackRock (IBIT) and Fidelity (FBTC) and opening a short position on Bitcoin futures on the Chicago Mercantile Exchange.
Now that strategy has stopped working, so there has been a rapid and massive outflow of liquidity from the market, causing Bitcoin prices to fall. Kyle Chass is sure that hedge funds don't care about Bitcoin and they weren't betting on the coin's growth.
In his opinion, the closure of cash-and-carry positions will continue in the near future until hedge funds finally leave the market. The volatility of the first cryptocurrency will remain high due to the liquidation of leveraged positions, which will lead to sharp fluctuations in the price of digital gold.
