Ongoing Outflows from US Spot Bitcoin ETF
For the past eight days, the US Spot Bitcoin ETF has faced significant outflows, totaling over $2 billion since May 14. Tuesday marked another disappointing day in this ongoing trend.
A Distinct Sell Order
On Tuesday, a trader executed a sell order exceeding 29 million shares of BlackRock’s iShares Bitcoin Trust ETF via a dark pool. This private trading platform, popular with institutional investors, allows large orders to be completed discreetly, away from public markets.
This transaction, worth $1.3 billion, took place at 2:30 p.m. UTC at a price of $43.16 per share. According to Alex Thorne, who heads corporate research at Galaxy Digital, this marks the largest dark pool transaction the fund has ever recorded.
Bloomberg ETF analyst Eric Balciunas supported this assertion, highlighting that the sell order was over 22 times greater than the second largest IBIT sell order logged the same day. The trader’s identity remains unknown.
Bitcoin’s Immediate Reaction
Data from TradingView reveals that Bitcoin reacted swiftly. Within 10 minutes post-trade, its price plummeted by 1.45%, dropping from $77,870 to $76,721. The decline persisted, and approximately 12 hours later, Bitcoin hit a 24-hour low of $75,600, marking a total drop of 2.5% for the day.
Total outflows from the US Spot Bitcoin ETF on Tuesday reached $333 million, with IBIT alone contributing more than $192 million. This brings the cumulative outflows since May 14 to over $2 billion.
Institutional Withdrawals
This downturn aligns with a broader trend of financial institutions pulling back. For instance, Jane Street cut its Bitcoin ETF holdings by around 70% in the first quarter, while Goldman Sachs reduced its stake by 10%.
Traditionally, Bitcoin has operated outside the scope of conventional financial markets. However, the emergence of U.S.-based Bitcoin ETFs has attracted institutional investors, some of whom appear to be exiting now.
The influx of new capital into the market doesn’t seem to compensate for the ongoing withdrawals. It’s still uncertain whether Tuesday’s massive dark pool trade indicates a strategic pivot by major stakeholders or if it was merely a singular portfolio adjustment.
Featured image from Unsplash, chart from TradingView.
