A $1.26 billion block sale of BlackRock’s iShares Bitcoin Trust (IBIT) this week may have been driven by a large investor looking for a quick exit from bitcoin exposure rather than undoing a common hedge fund trading strategy.
This is according to an analysis published by cryptocurrency investment firm NYDIG.
The transaction took place on May 26, when 29.21 million IBIT shares changed hands off-exchange at $43.16 per share. The trade was executed at a discount of $1.01 to IBIT’s market price of $44.17 at the time, representing a 2.3% concession and approximately $29.5 million in execution costs.
NYDIG said the size of the discount suggests the seller prioritized certainty and speed over price maximization. The trade was reported through the FINRA/Nasdaq TRF Carteret facility, which is commonly used for privately negotiated off-exchange transactions.
Some market participants had speculated that the block could have been linked to a bitcoin-based trade, in which investors maintain spot exposure to bitcoin while shorting futures contracts.
NYDIG rejected that explanation, arguing that the discount would have significantly reduced the strategy’s expected returns.
The firm also noted activity in CME bitcoin futures. The IBIT position represented exposure equivalent to approximately 3,700 CME bitcoin futures contracts.
However, only 91 contracts were traded during the minute the block was executed, without any unusual increase in futures volume.
“The size of the trade, the 2.3% execution discount, the absence of corresponding CME futures activity, and the limited universe of potential sellers collectively weigh against the view that the transaction represented a contemporaneous reduction in base trading,” NYDIG global head of research Greg Cipolaro wrote.
The selling came as US spot bitcoin ETFs experience sustained outflows. According to SoSoValue data, the funds recorded daily net outflows on all trading days from May 15 to May 29. Total assets across the category fell from $107.75 billion on May 14 to $94.17 billion on May 29. Meanwhile, the price of bitcoin has fallen 16% this year, while most other assets, such as stocks and commodities, have risen as capital continues to flow out of cryptocurrencies.
Read more: Bitcoin falls to 13th largest asset as capital flees to artificial intelligence and precious metals
difficult to identify
While IBIT recorded about $720 million in net redemptions between May 26 and 27, NYDIG said ETF flow data cannot be used to directly identify the seller or link specific redemptions to the block transaction.
NYDIG noted that the position exceeded the reported holdings of every IBIT investor disclosed in recent 13F filings, making identification difficult.
The firm said public data cannot determine whether the sale was driven by investor redemptions, risk management restrictions or a discretionary decision to reduce exposure to bitcoin.
Still, NYDIG said the transaction stands out because a large holder chose to accept a significant discount to exit a bitcoin-linked position valued at more than $1 billion during a period of persistent outflows and while the price of bitcoin remains below $80,000.
