A massive $1.26 billion block trade of BlackRock's iShares Bitcoin Trust (IBIT) this week likely represented a large investor's urgent exit from bitcoin exposure rather than the unwinding of a typical hedge-fund basis trade, according to crypto investment firm NYDIG.
On May 26, 29.21 million IBIT shares changed hands off-exchange at $43.16 per share, a 2.3% discount to the market price of $44.17 at the time. The execution cost amounted to roughly $29.5 million. The transaction was reported via the FINRA/Nasdaq TRF Carteret facility, commonly used for privately negotiated off-exchange deals.
NYDIG Rejects Basis-Trade Hypothesis
Some market participants speculated the block could be tied to a bitcoin basis trade, where investors hold spot bitcoin exposure while shorting futures. NYDIG pushed back, arguing the discount would have severely eaten into the strategy's expected returns.
The firm also pointed to activity in CME bitcoin futures. The IBIT position represented exposure equivalent to roughly 3,700 CME bitcoin futures contracts, yet only 91 contracts traded during the minute the block was executed — no unusual surge in 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 basis-trade unwind,” wrote Greg Cipolaro, NYDIG's global head of research.
Persistent ETF Outflows and Bitcoin Price Decline
The block sale came amid sustained outflows from U.S. spot bitcoin ETFs. According to SoSoValue data, the funds recorded daily net outflows every trading day from May 15 through May 29. Total assets across the category fell from $107.75 billion on May 14 to $94.17 billion by May 29. Bitcoin price has dropped 16% year to date, while equities and commodities have surged as capital drains from crypto.
Seller Identity Remains Unclear
IBIT saw about $720 million in net redemptions across May 26 and May 27. However, NYDIG noted that ETF flow data cannot be used to directly identify the seller or link specific redemptions to the block transaction. The position exceeded the holdings of every disclosed IBIT investor in recent 13F filings, making identification difficult.