Another interesting aspect to support the hypothesis is the realized volatility regime. This summer, realized vol on $BTC (and $IBIT) completely collapsed to its absolute lowest levels on record. This was due to a massive short vol position built up in IBIT. Remember, IBIT is the FOURTH most liquid options market in the world behind SPY, QQQ, and SPX Index options.

That short vol position massively compressed the price, which lowered volume and created a powder keg. Then on Oct 10, it completely blew up.

If the fund(s) were shorting vol heavily (as any OG Bitcoiner looking to generate income on their stack would do) and maybe didn't have proper risk controls in place, then Oct 10 could have blown a hole in their balance sheet, which kicked off the spiral.

Then today, ivol completely blew out, hitting FTX blowup levels. This would have completely obliterated anyone with a short vol position that was maybe hoping for a recovery to avoid realizing a massive loss on a short vol position.

It is very obvious today that some capitulated and/or completely died, i.e. the fund(s) being liquidated.

This would also explain the 2x spike in ivol today from yesterday on the 1DTE tenor, with very steep ivol decay across the following days/weeks as all of the pressure was concentrated in that one tenor.

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