The STRC and SATA selloff looks like a pretty serious leverage unwind event. These instruments were being treated (and marketed) like high-yield, low-volatility bitcoin-adjacent income products. Folks took that loose promise and then looped aggressive leverage into the trade, borrowing money at x and collecting 11.5% on the position. When the leverage position deteriorates to 75% of what it once was, the effective interest expense on the carry trade blows out the 11.5% yield, and then some. Meaning the trade goes into “negative carry” where you’re losing on both sides. It seems that lots of folks took this trade and ran with it when the suitcoiners promised risk free yield at 11.5%. This leverage rinse has dragged down bitcoin with it. It might take some time, but I expect buying bitcoin at these prices will age quite nicely. Perhaps a generational buying opportunity.
The broader bitcoin point is simple: stack real bitcoin and you can ignore most of this noise. Financial products around bitcoin will always create their own mini-cycles of leverage, liquidation, and forced selling. That does not change the underlying asset.