Bitcoin (BTC) plummeted over 40% to $59,930, hitting a year-to-date low. Analysts blame Hong Kong hedge funds and U.S. bank products for the crash, with Bitcoin possibly falling below $60,000. Leveraged bets and yen borrowing may have driven the selloff, forcing miners to sell quickly. Morgan Stanley’s exposure to Bitcoin ETFs also contributed to the downturn.

Hong Kong hedge funds placed leveraged bets on Bitcoin, expecting prices to rise. When yen borrowing costs increased, these bets went sour, leading to quick asset sales. Morgan Stanley may have been forced to sell Bitcoin to hedge exposure in structured notes tied to spot Bitcoin ETFs, creating negative gamma and accelerating the downturn.

A potential mining exodus may have worsened Bitcoin’s decline. AI data center demand is causing miners to pivot, leading to a drop in hash rate. Some miners, like Riot Platforms and IREN, are shifting focus to AI. The Hash Ribbons indicator signals miner income stress, with an estimated electricity cost to mine Bitcoin around $58,160.

If Bitcoin falls below $60,000, miners could face financial strain. Long-term holders are reducing exposure, with wallets holding 10 to 10,000 BTC now controlling a smaller share of supply. This article does not offer investment advice, and readers are urged to conduct their own research before making decisions.

Read more at Cointelegraph: What Crashed Bitcoin? 3 Theories Behind BTC’s 40% Price Dip in a Month