BlackRock IBIT Block Sale Raises Questions Over Bitcoin Exposure

TLDR

• NYDIG said the $1.26 billion IBIT block sale likely came from a large investor seeking a fast bitcoin exit.
• The seller accepted a 2.3% discount on 29.21 million IBIT shares, creating about $29.5 million in execution costs.
• NYDIG rejected the basis trade unwind theory because CME bitcoin futures volume showed no matching spike.
• U.S. spot bitcoin ETFs recorded daily net outflows from May 15 through May 29, according to SoSoValue data.
• NYDIG said public data cannot identify the seller or confirm what drove the large IBIT sale.

A major IBIT block sale has raised questions about whether a large investor has rushed to cut more than $1 billion in bitcoin exposure.

NYDIG said in a new analysis that the May 26 transaction looked less like a hedge-fund basis trade unwind and more like a fast exit by a large holder. The trade involved 29.21 million shares of BlackRock’s iShares Bitcoin Trust, known as IBIT, which changed hands away from public exchanges at $43.16 per share.

NYDIG Questions Basis Trade Theory

According to NYDIG, the seller accepted a $1.01 discount to IBIT’s market price of $44.17 at the time. The firm said the 2.3% price concession cost the seller about $29.5 million, a level NYDIG said suggests the holder valued speed and certainty over a better sale price.

The transaction was reported through the FINRA/Nasdaq TRF Carteret facility, which handles privately negotiated off-exchange trades. Some traders had suggested the sale could relate to a bitcoin basis trade, where investors hold spot bitcoin exposure and short futures contracts.

NYDIG rejected that explanation in its report. The firm said the discount would have reduced the expected return from such a strategy too sharply.

CME Futures Activity Was Limited

Greg Cipolaro, NYDIG’s global head of research, said the size of the trade, the discount, CME activity, and the small group of possible sellers worked against the basis-trade theory.

NYDIG said the IBIT block equaled exposure of about 3,700 CME bitcoin futures contracts. However, the firm said only 91 futures contracts traded during the minute when the IBIT block crossed, with no major rise in CME futures volume.

At the same time, U.S. spot Bitcoin ETFs have faced steady withdrawals. SoSoValue data cited in the report showed daily net outflows from May 15 through May 29. Total assets across the category fell from $107.75 billion on May 14 to $94.17 billion on May 29.

IBIT also posted about $720 million in net redemptions across May 26 and May 27, according to NYDIG. However, the firm warned that ETF flow data cannot identify the seller or directly connect redemptions to the block sale.

Seller Remains Unknown

NYDIG said the position was larger than any IBIT holding disclosed in recent 13F filings. The firm said public records cannot show whether redemptions, risk limits, or a discretionary decision caused the sale.

Still, NYDIG said the trade stood out because a holder accepted a steep discount to exit a bitcoin-linked position worth more than $1 billion while bitcoin remained below $80,000.

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