- IBIT traded over $10B on Feb. 5 with record put activity as Bitcoin fell, yet ETF inflows topped $300M.
- Forced deleveraging and options hedging widened CME basis spreads, pointing to unwinds in market neutral trades.
- Bitcoin rebounded over 10% on Feb. 6 as CME open interest recovered faster than Binance amid ongoing deleveraging.
Bitcoin fell 13.2% on February 5 during a broad market selloff that rippled through U.S. risk assets. The decline coincided with record trading in BlackRock’s IBIT ETF amid extreme volatility across equities. According to Jeff Park, ProCap CIO, the move came during one of the most severe capital markets sessions in recent years.
Record IBIT Activity During Market Stress
According to Jeff Park, IBIT posted record trading volume exceeding $10 billion on February 5. That figure doubled the ETF’s prior high since launch. Notably, options activity also reached a record contract count, led mainly by put trading rather than calls.
At the same time, IBIT price action closely tracked software stocks and other risk assets. Goldman Sachs’ prime brokerage desk reported February 4 as one of the worst days for multi-strategy funds. The desk measured the event as a 3.5 z-score, marking an extremely rare performance shock.
As risk managers reacted, funds moved to fast reduce exposure. According to Park, this process explains why February 5 turned into a widespread selloff. However, despite the sharp price decline, IBIT did not record large net redemptions.
Instead, IBIT saw roughly six million new shares created, adding more than $230 million in assets. Across the broader Bitcoin ETF market, inflows exceeded $300 million, according to Park.
Deleveraging, Basis Trades, and Options Pressure
Park said the selloff likely hit multi-asset portfolios rather than crypto-only funds. These portfolios often rebalance automatically during extreme correlations. He also pointed to accelerated downside pressure from options markets.
CME Bitcoin basis spreads widened sharply on February 6, jumping from 3.3% to about 9%. Park said this move suggests forced unwinding of basis trades, involving spot sales and futures purchases.
As dealers adjusted hedges, short gamma exposure intensified selling pressure. Park added that market makers likely sold IBIT aggressively, creating inventory rather than triggering redemptions.
Rebound Dynamics on February 6
Bitcoin rebounded more than 10% on February 6. During that session, CME open interest recovered faster than activity on Binance. According to Park, this shift indicates renewed positioning in market-neutral strategies.
Meanwhile, Binance open interest continued to decline, reflecting ongoing deleveraging among crypto-native traders. Park said these combined flows explain why ETF creations remained balanced while prices stayed lower.
