Is This the End of Crypto? Jeff Park’s Shocking Revelation!

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So, apparently, according to this Bitwise advisor guy, Jeff Park, the whole February 5 crypto selloff was due to something called multi-asset portfolio deleveraging. Sounds fancy, right? But let’s be real, it’s just a posh way of saying everyone panicked and started selling stuff like it was a clearance sale at a discount store.

“The De-Gross Diet-eat nothing, lose everything!”

CME basis trade unwinding drove violent deleveraging

So, Jeff Park thinks the CME basis trade was behind all the chaos. The near-dated basis jumped from 3.3% on February 5 to 9% on February 6. One of the biggest moves since the ETF launched. I’ve seen smoother transitions in a toddler’s temper tantrum.

– Jeff Park (@dgt10011) February 7, 2026

Multi-strategy funds like Millennium and Citadel? They were holding huge positions in the Bitcoin ETF complex. And they had to unwind those basis trades by selling spot while buying futures. Sounds simple enough-like trying to juggle while riding a unicycle. Good luck with that!

IBIT was more correlated with software equities than gold lately. Gold? Nah, not the cool kid at this party. It’s like trying to get your friends to ditch the bar for a museum trip. Not happening.

So, the drama? It started with software equity selloffs. Who knew software could cause this much trouble? It’s like when your computer crashes, but instead of losing your work, you lose billions.

Structured products created crypto bloodbath

Structured products with knock-in barriers? Yeah, they contributed to the selling frenzy. A JPMorgan note priced in November had a barrier at $43,600. That’s like setting up a trap and then wondering why the mice are running everywhere.

Notes from December when Bitcoin dropped 10% had barriers in the $38,000-$39,000 range. It’s like having a safety net that’s full of holes!

Put buying behavior in crypto markets meant dealers were naturally short gamma. If you don’t know what that means, don’t worry-I’m still trying to figure it out myself.

Options were sold too cheaply compared to the wild moves that popped up, worsening the downside. It’s like buying popcorn at the movies-always overpriced, but you do it anyway. Dealers held short gamma on puts from the $64,000-$71,000 range. That’s the sweet spot of regret!

February 6 saw CME open interest expand faster than Binance. The basis trade partially recovered, like a bad haircut that somehow looks good after a week. Meanwhile, Binance open interest collapsed, which is just tragic.

Park concluded that tradfi derisking was the culprit behind Bitcoin hitting rock bottom. It’s non-directional activity requiring extra inventory-a fancy way of saying, “We’re all out of options here!”

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2026-02-08 19:29