Key Takeaways
- An unidentified investor offloaded $1.26 billion in BlackRock’s IBIT shares through a single off-exchange block transaction on May 26
- The transaction involved a 2.3% discount equating to roughly $29.5 million, indicating urgency trumped price optimization
- Crypto investment firm NYDIG dismissed basis trade liquidation theories, citing the significant discount and absence of corresponding CME bitcoin futures activity
- The position size exceeded any individual IBIT stakeholder revealed in recent 13F regulatory filings, obscuring the seller’s identity
- Spot bitcoin ETFs in the U.S. experienced consecutive daily outflows from May 15 through May 29, with aggregate holdings declining from $107.75 billion to $94.17 billion
A mysterious seller executed a $1.26 billion disposal of BlackRock’s iShares Bitcoin Trust shares on May 26 through a single off-exchange transaction, triggering widespread speculation throughout cryptocurrency circles regarding the seller’s identity and underlying motivations.
The massive transaction encompassed 29.21 million IBIT shares executed at $43.16 apiece. This represented a $1.01 markdown from the prevailing market price of $44.17 — translating to a 2.3% haircut valued at approximately $29.5 million.
The deal was processed through the FINRA/Nasdaq TRF Carteret platform, which facilitates privately arranged off-exchange transactions.
NYDIG Dismisses Basis Trade Liquidation Hypothesis
Certain market analysts theorized the disposal might be connected to unwinding a bitcoin basis trade — a hedge fund tactic involving long spot bitcoin positions paired with short futures contracts. However, NYDIG, a prominent crypto investment firm, rejected this interpretation.
NYDIG highlighted two critical factors undermining this theory. Initially, absorbing a $29.5 million discount would substantially erode anticipated returns from such a strategy. Additionally, CME [[LINK_START_0]]bitcoin[[LINK_END_0]] futures trading volume showed no abnormal surge coinciding with the block trade execution.
The IBIT holding corresponded to approximately 3,700 CME bitcoin futures contracts. Yet merely 91 contracts changed hands during that identical minute. This discrepancy rendered a basis trade closure improbable, according to Greg Cipolaro, NYDIG’s global head of research.
Seller Identity Remains Unknown
NYDIG noted the position surpassed any individual IBIT allocation reported in recent 13F disclosure documents. This makes pinpointing the seller challenging through publicly available information.
The firm indicated uncertainty whether the sale stemmed from client redemption requests, risk management protocols, or a deliberate decision to reduce bitcoin market exposure. IBIT registered approximately $720 million in net redemptions across May 26 and 27, though ETF flow metrics cannot be definitively traced to particular block transactions.
What NYDIG confirmed is that a substantial stakeholder elected to absorb significant losses for rapid liquidation, occurring amid broader bitcoin ETF capital flight.
Persistent Bitcoin ETF Outflows Throughout May
U.S. spot bitcoin ETFs registered net capital outflows during each trading session from May 15 extending through May 29. Cumulative assets under management across all bitcoin ETFs contracted from $107.75 billion on May 14 to $94.17 billion by May 29.
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Bitcoin prices have declined 16% year-to-date. Concurrently, equity markets and commodity sectors have appreciated, with investment capital rotating from cryptocurrency into AI-focused equities and precious metal holdings.
The IBIT block transaction represents one of the most substantial individual withdrawals from a bitcoin ETF vehicle documented to date. The sale occurred during an unprecedented sustained outflow period for the bitcoin ETF sector since these products launched.
