I have a hypothesis that Bitcoin post-2018 is largely held by a handful of major banks as a way to sidestep anti money laundering rules. It's widely known (and proven in court) that the major banks routinely serve billionaire-class criminals (real criminals like drug cartels and terror groups) and large crypto holdings and prop trading operations allow them to move money on and off their books with relative ease.
A slowdown in money laundering activity (as would be expected during an extended period of restriction of goods and services) would lead to a rapid drop in crypto prices.
I think this is a misunderstanding about how banks work. The board of directors or CEO of HSBC didn’t decide to get into the cartel money laundering business. Rather, some middle managers decided to turn a blind eye to some dodgy transactions, which got past the Bank’s AML controls, which were not up to scratch. I’m not justifying anything, they reneged on their legal responsibilities, but banks aren’t conscious entities that decide things like that.
Also it’s highly unlikely a bank could hold vast BTC reserves without the regulators finding out about it. Anyway BTC is used for money laundering, but that doesn’t require holding reserves. Most money laundering transactions transit into and out of BTC very quickly. The only reason to keep BTC for very long is speculation.
I believe a more likely theory for the crash was the large exchanges pushing the price down on various exchanges to make money off the leveraged longs and then pair that with panic and you see this price plummet.
A slowdown in money laundering activity (as would be expected during an extended period of restriction of goods and services) would lead to a rapid drop in crypto prices.