Who Sold $1.26 Billion Worth of BlackRock Bitcoin ETF?

A massive $1.26 billion transaction involving BlackRock's spot Bitcoin ETF has become one of the most discussed events in the crypto market this week. The unusually large sale triggered speculation across Wall Street and crypto circles, with many traders trying to identify who sold such a significant position and why.

While some initially believed the trade was linked to a hedge fund strategy known as the basis trade, crypto investment firm NYDIG has pushed back against that theory. Instead, the firm believes the transaction was more likely a rapid exit by a large investor seeking immediate liquidity, even at a substantial cost.

The $1.26 Billion Bitcoin ETF Trade

The transaction took place on May 26 when approximately 29.21 million shares of BlackRock's iShares Bitcoin Trust (IBIT) changed hands through an off-exchange block trade.

According to market data, the shares were sold at $43.16 each, while IBIT was trading around $44.17 at the time. That means the seller accepted a discount of roughly $1.01 per share, equivalent to about 2.3%. In dollar terms, the seller gave up nearly $29.5 million simply to complete the transaction quickly.

The trade was executed through the FINRA/Nasdaq TRF Carteret facility, a platform commonly used for large privately negotiated transactions between institutional investors.

Because of its enormous size, the trade immediately sparked questions across the investment community.

Why NYDIG Doesn't Believe It Was a Basis Trade

One of the most popular theories suggested that the transaction was tied to a Bitcoin basis trade. The strategy typically involves buying spot Bitcoin exposure through ETFs while simultaneously shorting Bitcoin futures contracts to capture price differences between the two markets.

When traders unwind the strategy, they generally sell ETF holdings and close futures positions at the same time. However, NYDIG's Head of Research, Greg Cipolaro, believes the available evidence doesn't support that explanation.

According to the firm's analysis, the discount accepted by the seller was simply too large.

A loss of nearly $30 million would significantly reduce the profitability of a basic trade and make the strategy far less attractive.

Futures Market Activity Doesn't Match

NYDIG also examined trading activity on the Chicago Mercantile Exchange (CME), where institutional investors commonly trade Bitcoin futures.

The IBIT position involved exposure equivalent to roughly 3,700 CME Bitcoin futures contracts. If the seller had been unwinding a basis trade, analysts would have expected a noticeable surge in futures trading volume at the same time.

Instead, only 91 Bitcoin futures contracts traded during the minute the block transaction occurred. There was no unusual spike in activity that would normally accompany the closure of a position that large.

According to Cipolaro, this lack of corresponding futures activity strongly weakens the basis-trade argument.

ETF Outflows Continue Rising

The sale also happened during a period of growing weakness in the U.S. spot Bitcoin ETF market.

Data from SoSoValue shows that spot Bitcoin ETFs recorded net outflows on every trading day between May 15 and May 29.

During that period, total assets across the ETF sector declined from approximately $107.75 billion to $94.17 billion.

At the same time, Bitcoin prices remained under pressure and continued trading below the important $75,000 level.

Mystery Seller Remains Unknown

Despite extensive analysis, NYDIG admits that identifying the seller remains difficult.

The firm noted that the position exceeded the reported holdings of every publicly disclosed IBIT investor listed in recent regulatory filings.

Additionally, ETF redemption data cannot directly reveal which investor initiated the sale.

Several possibilities remain on the table.

The sale could have resulted from:

• Portfolio rebalancing
• Risk management requirements
• Institutional redemptions
• A strategic decision to reduce Bitcoin exposure
• Liquidity needs from a large investor

At this stage, public data does not provide a definitive answer.