This week saw a significant transaction involving BlackRock’s iShares Bitcoin Trust (IBIT), with shares selling for $1.26 billion. This move appears to be driven by larger investors looking for a swift exit from Bitcoin rather than a typical hedge fund strategy.
The sale happened on May 26, where 29.21 million IBIT shares were off-exchanged at $43.16 per share. This price came at a discount of $1.01 from the market value of $44.17 at that time, meaning a 2.3% concession, which translated to around $29.5 million in execution costs.
According to NYDIG, the substantial discount indicates that the sellers prioritized speed and certainty over achieving the best price. The transaction was processed via the FINRA/Nasdaq TRF Cartelet facility, often used for private off-exchange transactions.
Some participants in the market speculated that this block could be linked to Bitcoin basis trading—where investors hold spot Bitcoin while shorting futures contracts. However, NYDIG dismissed this idea, noting that the discount would greatly compromise the potential returns from such a strategy.
It’s also interesting to mention the activity in CME Bitcoin futures. The position in IBIT corresponds to around 3,700 CME futures contracts, but only 91 contracts were traded during the minute of the transaction, with no significant spike in futures volume.
Greg Cipolaro, head of global research at NYDIG, emphasized that several factors, including the size of the trade, the 2.3% execution discount, and the absence of a matching CME futures contract, point against the notion that it was part of basis trading.
The sell-off was prompted by ongoing outflows from U.S. spot Bitcoin ETFs. Data from SoSoValue shows that the Fund faced daily net outflows every day from May 15 to May 29, causing total assets in this category to drop from $107.75 billion to $94.17 billion. During the same period, Bitcoin prices fell by 16%, while many other assets, such as stocks and commodities, saw gains as capital moved away from cryptocurrencies.
IBIT experienced around $720 million in net redemptions between May 26 and May 27. However, NYDIG pointed out that ETF flow data can’t directly identify sellers or connect specific redemptions to block trades.
Additionally, NYDIG noted that this redemption level exceeds what’s reported in the 13F filings of all IBIT investors, making it hard to trace. The available public data fails to clarify whether these sales stemmed from investor redemptions, risk management needs, or a strategic decision to lower Bitcoin exposure.
Nonetheless, NYDIG emphasized the prominence of this transaction, highlighting that large holders accepted substantial discounts to liquidate more than $1 billion in Bitcoin-related assets amid ongoing capital outflows, especially with Bitcoin prices lingering below $80,000.
