Business & Economics

Bitcoin Drops to $85K Amid Whale Covered-Call Wave and Carry-Trade Unwind

On 15 Dec 2025 BTC slid from ~$90K to $85K as option-selling ‘OG’ whales forced market-maker hedging while looming Bank of Japan tightening yanked liquidity and triggered a cascade of $200 M long liquidations.

By Tomás RydellDecember 16, 2025

Focusing Facts

Market maker Wintermute offloaded an estimated $1.5 billion in BTC during thin weekend trading, magnifying the decline.
Roughly $200 million of leveraged long positions were liquidated within hours once Bitcoin breached $90,000.
About 60 % of spot-ETF inflows—roughly $100 billion—now sit at an unrealized loss with an aggregate cost basis near $80,000.

The episode echoes the 1998 yen-carry unwind, when BOJ tightening forced global de-risking, and resembles the March 2020 oil ‘gamma squeeze’ where option dealers’ hedges drove spot prices. Structurally, it spotlights two long-term forces: (1) derivatives are overtaking spot flows as price setters—much as S&P 500 futures did in the 1987 crash—and (2) Japan’s monetary pivots still steer world liquidity despite a decade of U.S.-centric narratives. Whether this matters a century from now will hinge on if Bitcoin can absorb institutional option yield strategies without repeating commodity-like boom-bust cycles; today’s stress tests the thesis that ETFs and treasuries provide a floor, but history shows—gold in 1980, dot-com stocks in 2001—that new financial rails can as easily transmit volatility as dampen it.

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