Did a Hong Kong Fund Trigger Bitcoin’s Recent Slump? – And Why Bithumb’s “Phantom” BTC Matters
By Yohan Yun – Feb. 15 2026
A Hong Kong‑Based Leverage Play Under Scrutiny
The sharp slide of Bitcoin to just under $60,000 on Thursday has reignited speculation that the dip was not purely market‑driven. A growing narrative on Crypto Twitter points to a leveraged spot‑Bitcoin exchange‑traded fund (ETF) strategy employed by a Hong Kong‑registered investment vehicle.
According to Parker White, head of operations at DeFi Development Corp, the fund allegedly tapped inexpensive Japanese‑yen financing to amass a large position in BlackRock’s spot‑Bitcoin ETF (ticker IBIT). The strategy was reportedly a classic “single‑asset” structure: concentrate most of the portfolio in the ETF to isolate margin risk, while using the cheap carry trade on the yen to boost leverage.
When the yen‑funded carry trade began to unwind—a process that has already weighed on silver and other commodities—the fund’s exposure to IBIT may have turned sour. As Bitcoin fell, options linked to the ETF supposedly forced a rapid liquidation, adding pressure to the broader market.
White’s hypothesis aligns with several observable facts:
- Record‑breaking IBIT activity – The ETF saw $10 billion of daily volume on the day Bitcoin breached its weekly low, suggesting heightened trading interest that could amplify price moves.
- Concentrated holdings – Data from public filings show that a handful of Hong Kong‑based funds hold a disproportionate share of their assets in IBIT, a pattern that differs from the diversification typical of institutional portfolios.
- Cross‑asset margin stress – The same unwind that may have hit the fund’s Bitcoin position also coincided with a sharp dip in silver, echoing the broader “yen‑carry trade” unwind discussed in recent market analyses.
Nevertheless, the theory remains unverified. The first‑quarter 13F filings, due in May, will be the first concrete source that can confirm whether any of the funds in question altered their IBIT exposure dramatically.
Key takeaway: If the conjecture proves true, it would illustrate how a single, highly leveraged ETF position—backed by cheap foreign‑currency funding—can ripple through the Bitcoin market, especially when paired with a broader macro‑economic unwind in the yen carry trade.
Bithumb’s “Phantom” Bitcoin Episode
While speculation swirls around the Hong Kong fund, a separate, more concrete event unfolded in South Korea. Bithumb, one of the country’s largest crypto exchanges, mistakenly airdropped an extraordinary amount of Bitcoin to users as part of a promotional campaign.
- Scale of the error – The glitch resulted in each of the selected winners receiving over 2,000 BTC. In total, the exchange sent roughly 620,000 BTC—valued at about $42.5 billion at current market prices.
- Recovery effort – Bithumb managed to claw back 99.7 % of the sent coins. However, a fraction of users managed to move and sell 1,788 BTC before the reversal.
- The “phantom” discrepancy – An August filing with South Korea’s Financial Supervisory Service (FSS) listed Bithumb’s on‑balance‑sheet Bitcoin holdings at about 42,000 BTC, roughly fifteen times less than the amount that was mistakenly distributed. If the exchange never actually possessed the surplus coins, the incident raises the specter of “phantom” assets being credited to users—an issue that could erode confidence in custodial integrity.
Under local crypto‑user‑protection regulations, exchanges are required to hold sufficient reserves to cover all deposited assets. The FSS governor signaled that regulatory action is possible under existing statutes, and on‑site inspections of Bithumb have already been launched.
Key takeaway: Even though most of the erroneously sent Bitcoin was recovered, the episode spotlights operational risks at centralized exchanges and underscores the importance of rigorous internal controls, especially in jurisdictions with strict custodial rules.
Connecting the Dots: Market Stress, Leverage, and Operational Fragility
Both stories illustrate different ways that leverage and operational missteps can amplify volatility in the crypto ecosystem:
| Aspect | Hong Kong Fund Theory | Bithumb Incident |
|---|---|---|
| Root cause | Potentially over‑leveraged spot‑BTC ETF position funded by cheap yen | Administrative error in promotional airdrop |
| Market impact | May have contributed to rapid sell‑pressure on Bitcoin and related assets (e.g., silver) | Minimal on‑chain price impact but raises concerns about exchange solvency |
| Regulatory lens | Would be examined under securities‑law frameworks if large institutional investors are involved | Directly triggers crypto‑custody regulation and possible penalties |
| Evidence | Largely speculative; pending 13F disclosures | Public filings, recoveries, and regulator‑initiated inspections |
The convergence of leveraged trading tactics and operational lapses could create feedback loops: a market shock precipitated by leveraged unwinds can strain exchanges, whose own risk management failures may then exacerbate loss of confidence.
Outlook
- For the Hong Kong fund hypothesis: Investors should monitor the upcoming 13F filings and any statements from the funds in question. A confirmed sudden drop in IBIT exposure would lend credence to the theory, while a static holding would suggest alternative drivers for Bitcoin’s dip.
- For Bithumb: The regulator’s findings will likely set a precedent for how South Korean authorities handle “phantom” asset scenarios. Market participants may demand higher transparency from exchanges regarding reserve holdings, especially as the region continues to attract large volumes of retail crypto activity.
In an environment where cross‑border financing, leveraged products, and centralized exchange operations intersect, both episodes serve as cautionary tales. Robust oversight, transparent reporting, and disciplined risk‑management practices will be essential to prevent isolated incidents from cascading into broader market disruptions.
Yohan “Hyoseop” Yun is a staff writer at Cointelegraph, covering blockchain, crypto markets, and policy. He holds Bitcoin, Ethereum and Solana above the outlet’s disclosure threshold.
Source: https://cointelegraph.com/magazine/hk-bitcoin-etf-bithumbs-phantom-btc-asia-express/?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
