A $1.26 billion sale of BlackRock’s iShares Bitcoin Trust signals a major investor's quick exit from bitcoin exposure, according to NYDIG.
A recent transaction involving BlackRock’s iShares Bitcoin Trust (IBIT) has raised eyebrows in the financial community, as a substantial sale of $1.26 billion suggests that a significant investor is looking to swiftly exit their bitcoin exposure. This assessment comes from NYDIG, a crypto investment firm.
The sale occurred on May 26, with 29.21 million IBIT shares traded off-exchange at a price of $43.16 per share, which was notably lower than the market price of $44.17 at that time, representing a 2.3% discount and incurring approximately $29.5 million in execution costs.
NYDIG indicates that this discount reflects the seller's priority for speed and certainty rather than maximizing the sale price. The trade was executed through the FINRA/Nasdaq TRF Carteret facility, commonly used for private, off-exchange transactions.
While some analysts speculated that the sale could be linked to a bitcoin basis trade—where investors maintain spot bitcoin exposure while shorting futures—NYDIG dismissed this notion, citing that the discount would undermine the returns expected from such a strategy.
Furthermore, NYDIG noted the trading activity in CME bitcoin futures during the transaction. The IBIT position was equivalent to around 3,700 CME bitcoin futures contracts, but only 91 contracts were traded in the minute the block sale occurred, with no significant increase in futures volume.
Greg Cipolaro, NYDIG’s global head of research, emphasized that the trade’s size, the execution discount, the lack of corresponding futures activity, and the limited number of potential sellers contradict the idea that this was a basis-trade unwind.
This significant sale coincides with a broader trend of outflows from U.S. spot bitcoin ETFs, as reported by SoSoValue. These funds saw daily net outflows from May 15 to May 29, reducing their assets from $107.75 billion to $94.17 billion. In contrast, bitcoin’s value has declined by 16% this year, while other asset classes have performed better.
Despite IBIT experiencing around $720 million in net redemptions on May 26 and 27, NYDIG noted that the ETF flow data does not allow for direct identification of the seller or link specific redemptions to this block trade. The position sold exceeded the reported holdings of all disclosed IBIT investors in recent 13F filings, making it difficult to pinpoint the seller.
NYDIG concluded that the transaction is significant, as it illustrates a major holder’s willingness to accept a substantial discount to divest from a position exceeding $1 billion during a period of ongoing outflows and while bitcoin prices remain below $80,000.
