BlackRock IBIT Hedging Likely Triggered Recent Bitcoin Crash, Hayes Says

Highlights:

• Arthur Hayes says BlackRock’s IBIT hedging drove the recent Bitcoin price collapse.
• Hayes is compiling bank-issued notes to spot key levels causing sudden swings.
• US ETFs sold significantly, but retail investors are starting to return to Bitcoin.

Arthur Hayes, co-founder of BitMEX, has blamed BlackRock’s iShares Bitcoin Trust, known as IBIT, for the recent Bitcoin crash. His comments came after Bitcoin recovered 3% in one day. The price moved back to $70,000 after falling to $60,000 earlier in the week. 

IBIT Pressure Triggers Major Crypto Market Losses

In a post on X, Hayes said IBIT shares fell sharply, forcing banks and dealers to rebalance positions. As a result, heavy selling spread across Bitcoin and related derivatives. He explained that this kind of mechanical selling can cause fast and sudden price moves. The risk becomes higher when markets are already weak. Because of this, Hayes said he is working on a detailed list of bank issued notes. The goal is to find trigger levels that can push prices quickly in either direction.

$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

Meanwhile, the crash erased nearly $2 trillion from the total crypto market value. Market capitalization had peaked at $4.38 trillion last October. The sharp drop showed how weak investor confidence has become. It also highlighted the scale of losses across digital assets.

Data from CryptoQuant indicated that institutional demand had weakened significantly. The firm reported that United States exchange-traded funds, including BlackRock’s IBIT, shifted from strong accumulation seen last year to active selling. Such selling activity was considered a major reason behind the recent market crash.

CryptoQuant analysts also indicated that continuous selling reflected declining interest from traditional investors and showed rising negative sentiment toward the crypto sector. Their view suggested that institutions that previously supported Bitcoin’s rally were now reducing exposure. Even as large institutions pulled back, some signs pointed toward a return of retail interest.

Bitwise Europe head André Dragosch suggested that smaller investors were stepping in again. In an X post, he said, “Retail is coming back.” His comment hinted that current price levels may look attractive to individual buyers.

Retail is coming back https://t.co/4Cc1HBR2p9

— André Dragosch, PhD⚡ (@Andre_Dragosch) February 7, 2026

Bitcoin ETF Sees $231.6M Inflows After Heavy Outflows

BlackRock’s spot Bitcoin exchange-traded fund recorded fresh inflows on Friday. Data showed $231.6 million moved into the fund after two days of strong selling during a volatile week for Bitcoin. Earlier in the week, pressure remained high. The iShares Bitcoin Trust ETF saw total outflows of $548.7 million across Wednesday and Thursday. This happened as the overall market mood weakened sharply. 

During the same period, Bitcoin briefly fell to $60,000, according to figures shared by Farside. However, broader ETF activity showed some improvement by the end of the week. Preliminary Farside data indicated that nine United States-based spot Bitcoin ETF products recorded combined inflows of $330.7 million. This followed three straight days of outflows that had reached a total of $1.25 billion.

In 2026, IBIT has seen net inflows on just 11 trading days so far. Market participants and Bitcoin holders often track ETF flow patterns closely. These trends can signal potential price direction and show whether demand for Bitcoin is picking up.