A $1.26 billion block trade in BlackRock’s iShares Bitcoin Trust (IBIT) made last week was likely a whale making a quick exit on a directional trade, says Greg Cipolaro, the head of research at financial services company NYDIG.

On Tuesday, an unknown trader sold 29.2 million shares of BlackRock’s IBIT on a dark pool, a private trading platform that institutions use to discreetly make large trades outside public markets, sparking speculation about who made the trade and why.

Cipolaro said in a research note on Friday that several indicators were “consistent with a large directional holder exiting a concentrated position rather than a contemporaneous basis-trade unwind.”

He added that the seller accepting the sale at $1.01 below the market price of $44.17, forgoing $29.5 million in exchange for immediate execution, and using a private trading platform, pointed to such a large directional holder exiting.

Large transactions can move markets and affect overall sentiment. However, in this case, Bitcoin (BTC) slid 2.8% over the day after the trade. Bloomberg ETF analyst Eric Balchunas said at the time the market absorbed the sale well despite the significant block sale.

“The key unanswered question is whether the seller was responding to idiosyncratic constraints or expressing a broader investment view,” Cipolaro said.

“While the transaction details themselves cannot answer that question, they do, however, demonstrate that at least one sophisticated holder was willing to pay approximately $29.5 million to eliminate a $1.26 billion bitcoin-linked position immediately.”

US-listed Bitcoin ETFs have now recorded 11 straight trading days of net outflows, with a $333.6 million outflow on the same day as the massive IBIT trade, according to Farside Investors data. 

More than $2.9 billion has now flowed out from the ETFs since May 14, the last recorded net inflow across multiple funds.

U.S.-listed Bitcoin ETFs have recorded 11 straight trading days of net outflows. Source: Farside Investors

Related: Bitcoin falls out of the global top 10 assets as market cap dips below $1.5T 

Meanwhile, sentiment has also been volatile. The Crypto Fear & Greed Index, which measures overall crypto market sentiment, returned a score of 29 out of 100 on Monday, indicating “fear” in the market. It also posted an average rating of “fear” for May.

Cipolaro said the methods used by the whale entity to sell show urgency, but the motive remains unclear. He speculates that it could have been a forced sale driven by investor redemptions and balance-sheet constraints or an attempt to reduce the risk of exiting over multiple sessions.

“Public data cannot distinguish conclusively between these explanations,” he said. 

“However, the weakening technical backdrop, ongoing ETF outflows, and willingness to pay a substantial execution premium for immediacy are more consistent with discretionary liquidation rather than investor redemptions or a portfolio rebalance.”

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