"Wall Street quietly sold off"... $1.3 billion dark pool trade hidden behind Bitcoin's sharp drop

▲ Bitcoin (BTC), ETF/AI generated image

A large-scale sale of $1.3 billion from BlackRock's Bitcoin ETF was executed in a dark pool just before Bitcoin (BTC) plummeted, leading to an analysis that institutional selling shook the market.

According to cryptocurrency media outlet Cointelegraph on May 27 (local time), an anonymous trader sold 29.2 million shares of BlackRock's iShares Bitcoin Trust ETF (IBIT) for $1.3 billion on Tuesday. This transaction took place in a dark pool, a private trading platform used by institutions to quietly process large orders outside the open market.

According to TradingView data, immediately after the transaction was executed at 2:30 PM UTC, Bitcoin fell by 1.5% from $77,875 to $76,720 in just 10 minutes. Approximately 12 hours later, Bitcoin dropped further to a 24-hour low of $75,600, expanding its daily decline to 2.8%.

Alex Thorn, Head of Firmwide Research at Galaxy Digital, stated on X (formerly Twitter) that this was the largest dark pool trade he had ever seen. Bloomberg ETF analyst Eric Balchunas reported that the execution price for the 29.2 million IBIT shares sold was $43.16, and it was more than 22 times larger than the second-largest IBIT sell order on Tuesday.

Funds continue to flow out of US spot Bitcoin ETFs. These products recorded a net outflow of $333.6 million on Tuesday, marking eight consecutive trading days of net outflows, with IBIT's net outflow amounting to $192.4 million. Since the last net inflow on May 14, over $2 billion has exited all spot Bitcoin ETFs.

Cointelegraph pointed out that as US-based Bitcoin ETFs lowered the barrier for institutional investors to trade Bitcoin, Bitcoin has recently shown a high correlation with the US market. Institutional market maker Jane Street reportedly reduced its Bitcoin ETF holdings by approximately 70% in the first quarter, and investment bank Goldman Sachs also reduced its Bitcoin ETF positions by 10%.

This $1.3 billion IBIT sale has fractured the existing perception that Bitcoin is an asset separated from traditional financial markets. With the confirmation of a structure where the inflow and outflow of institutional funds through ETFs directly pressure Bitcoin's price, the market's focus is shifting from short-term rebounds to the sustainability of large ETF fund flows.

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