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Background Revealed Behind the $1.2 Billion BlackRock ETF Sale That Shook Bitcoin
A massive one-time sale of BlackRock's Bitcoin ETF last week caused significant turmoil across the cryptocurrency market.
On May 26, a large investor whose identity remains unknown sold $1.26 billion worth of BlackRock's Bitcoin ETF in a major over-the-counter (OTC) transaction. The entire position was sold below market price, contributing to Bitcoin's decline below the $73,000 level.
As part of the transaction, ETF shares with a market price of $44.17 were sold at a discount of $1.01 per share. This resulted in a loss of approximately 2.3%, or about $29.5 million.
NYDIG Analyst Offered an Explanation
Despite the market disruption caused by the trade, Greg Cipolaro, Head of Research at financial services firm NYDIG, analyzed the $1.26 billion IBIT sale.
While numerous theories have emerged regarding the motivation behind the transaction, Cipolaro argued that the sale was likely executed by an investor seeking an immediate exit from the market and a complete liquidation of their Bitcoin exposure.
"A sale at such a discount could only have been made by someone seeking an immediate exit from the position. The most important unanswered question is whether the seller was responding to specific constraints or expressing a broader investment view."
Investor Was Willing to Lose Nearly $30 Million for a Fast Exit
Although the details of the transaction alone are insufficient to determine the exact motive, they suggest that an experienced investor was willing to absorb an estimated $29.5 million loss in order to immediately exit a $1.26 billion Bitcoin-related position.
According to Cipolaro, the execution method clearly reflected urgency. However, both the seller's identity and the underlying motivation remain unknown.
Position Liquidation or Expectation of Further Declines?
In his conclusion, Cipolaro noted that publicly available data is insufficient to definitively determine why the sale occurred.
However, the structure of the transaction and the willingness to sell at a significant discount suggest that the trade looked less like the closing of a hedged position and more like the liquidation of a major investment stake by an investor anticipating further declines in the value of Bitcoin and related assets.
See also: "Bitcoin ETFs Lead Weekly Losses as $1.42 Billion Flows Out While Altcoin ETFs Attract Capital"
