NYDIG has countered speculation that a $1.26 billion block trade of BlackRock's iShares Bitcoin Trust (IBIT) on May 26 was driven by hedge funds unwinding a bitcoin basis trade. The transaction involved 29.21 million shares sold off-exchange at $43.16 per share, a 2.3% discount to the market price, resulting in roughly $29.5 million in execution costs. NYDIG argues that the large discount would have significantly eroded expected returns from a basis trade, which involves holding spot bitcoin while shorting futures. They also point to the lack of an unusual spike in CME bitcoin futures volume—only 91 contracts traded during the execution minute, far below the 3,700 contracts equivalent to the IBIT position. Instead, NYDIG suggests the seller prioritized speed and certainty, possibly due to risk-management constraints or a discretionary decision to reduce bitcoin exposure during a period of persistent outflows. The sale occurred as U.S. spot bitcoin ETFs faced sustained outflows, with total assets falling from $107.75 billion to $94.17 billion between May 14 and May 29, and bitcoin's price declining 16% year-to-date. NYDIG noted that the seller's identity remains unclear, as the position exceeded the holdings of any disclosed investor in recent 13F filings.

Key facts

• $1.26B IBIT block trade executed at 2.3% discount on May 26
• NYDIG rejects basis trade theory due to large discount and low CME futures volume
• Only 91 CME bitcoin futures contracts traded during execution minute
• Seller likely prioritized speed and certainty over maximizing price
• Persistent outflows from US spot bitcoin ETFs amid 16% BTC price drop this year

KeyAudit data perspective