Analyst links Bitcoin price decline to massive $1.3B ETF transaction on private exchange
According to Alex Thorn from Galaxy Digital, a $1.3 billion transaction involving BlackRock's Bitcoin ETF represents the most substantial sale he's witnessed on a dark pool trading platform.
Market analysts have observed that Bitcoin's sharp price decline occurred simultaneously with an unidentified trader's massive $1.3 billion disposal of BlackRock's Bitcoin exchange-traded fund shares on Tuesday.
The transaction involved 29.2 million shares of the iShares Bitcoin Trust ETF (IBIT) from BlackRock, executed at 2:30 pm UTC through a "dark pool," which refers to a private exchange platform that institutional players frequently utilize to execute substantial trades away from public market scrutiny.
The cryptocurrency market experienced immediate repercussions from this $1.3 billion transaction, as data from TradingView indicated that Bitcoin (BTC) experienced a 1.5% decline from $77,875 down to $76,720 within just 10 minutes following the 2:30 pm UTC timestamp.
The downward momentum continued as Bitcoin descended even further to reach a 24-hour low of $75,600 approximately 12 hours after the initial drop, representing a total daily decline of 2.8%.
Historically, Bitcoin has been perceived as an alternative asset class operating independently from conventional financial markets, but instruments like US-based Bitcoin ETFs have eliminated entry obstacles for institutional market participants seeking Bitcoin exposure, and lately the digital currency has demonstrated strong correlation patterns with traditional US equity markets.
In a statement posted to X, Alex Thorn, who serves as head of firmwide research at Galaxy Digital, a cryptocurrency investment firm, indicated that this represented the largest transaction executed via a dark pool that he has personally observed.
Eric Balchunas, who works as an ETF analyst for Bloomberg, additionally reported that the 29.2 million IBIT shares were sold at a price of $43.16 per share and exceeded the second-largest IBIT sell order recorded on Tuesday by more than 22 times.
Bitcoin ETF outflow streak continues
The streak of net outflows from US spot Bitcoin ETFs has now extended to eight consecutive trading days, with Tuesday recording $333.6 million in outflows, which included $192.4 million departing from IBIT specifically.
The cumulative outflows from these ETFs have now surpassed $2 billion since May 14, which marked the most recent day of net inflows registered across all the funds, serving as an indicator that institutional investor confidence in Bitcoin has diminished, with market participants withdrawing their exposure to Bitcoin ETFs at a pace that exceeds new capital entering the market.
Jane Street, an institutional market maker, decreased its Bitcoin ETF holdings by approximately 70% during the first quarter, meanwhile Goldman Sachs, the investment banking institution, trimmed its Bitcoin ETF position by 10%.