$1.29 billion of BlackRock's bitcoin ETF sold in dark pool trade

Scott Melker discusses the $1.29 billion dark pool trade on BlackRock's iShares Bitcoin Trust ETF (IBIT) amid outflows.

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The biggest story today is a great example of that. Here we have it right here. Whale alert.

That's how I read that. Whale alert. There's the whale. Someone dumped 1.29 billion of Black Rock Bitcoin ETF in a dark pool trade. The big sale happened amid a broader continued Exodus from US listed spot Bitcoin ETF. So,

we've long told a lot of stories about the inflows and outflows and we get these historic runs of inflows and of course, all of a sudden we go right into a historic run of outflows. Right now, I think we're at seven straight days of outflows. But this actual story is interesting. So, as I said, there was a single sale, 1.92, uh, 1.29 billion in Ibit that was executed in a dark pool. This was yesterday at 10:30 a.m. Eastern Standard Time.

My friend Alex Thorn over at Galaxy flagged it on X and he called it the biggest of its kind he's ever seen. And people may wonder what a dark pool sale is. It means it's privately negotiated, it's off exchange, and you don't know who the counterparty is. So they do this obviously because they don't want to market sell $1.29 billion of an asset because it would crash the price. This is by far the largest of its kind.

So the story that you're seeing written is the one above. Somebody dumped a whole lot. But when I look at the numbers, it's very interesting because you had this massive sale at 1.29 billion of Ibit, but if you look at the total Ibit net redemption yesterday, which means how many of uh how many Ibit, you know, shares were actually redeemed for the underlying asset, it was only 192.44 million.

So normally when you look at these outflow numbers, you're looking at the actual redemption. So you had a $1.29 billion sale, but total only 192 million in outflows. That's a gap of $1.1 billion of those shares that were bought by someone who did not redeem them. So this can give us some information about who that secret counterparty might be because it's clearly somebody that is not doing this mechanically, they're not a market maker.

They're someone who actually decided to buy these from that other person and to hold them.

So to me, that is the bigger story and if you wonder why Bitcoin price didn't actually move dramatically, it's because these didn't end up being redeemed and even though they were sold to someone, there was a willing party on the other side who wants to own these and likely own them long term. So, giving this some broader context, as I said, this is the seventh straight day of net ETF outflows, the second longest street ever. Right now we're at 1.8 billion ish over seven days with 2.26 billion withdrawn over the past two weeks.

So, Bitcoin obviously has not moved dramatically as a result of this, but it has, if we're being intellectually honestly, honest, generally moved uh pretty dramatically. So take a look at this right here.

This is a chart, as you can see of the top assets in the world by market cap. Gold there number one by many, many multiples, which was not actually the case. It was always number one, but not by this many multiples, maybe by a 2X. Uh now it's almost 6X Nvidia, but the the story here is that Bitcoin's down at 13, right? And I remember uh being on our shows and we were excited when it was passing silver and testing Apple, you know, getting up into these numbers.

Obviously, those have all continued to rise massively while Bitcoin has dropped. So you've had two assets going in separate directions. So, obviously Bitcoiners don't want to see that it's the 13th largest asset, smaller than Tesla and Meta, Saudi Ramco and Broadcom, right? But uh, this is a story of an uncorrelated asset. And as I've long said, you know, people want to own an uncorrelated asset in their portfolio, something with idiosyncratic risk, something that has a chance to do something different than the rest of your portfolio.

Unfortunately, sometimes that means your thing goes down when everything else goes up, but it also means that in the future there will be times when it goes up and other things go down. As always, I remain a Bitcoin bull and say, you just kind of hold on to this thing and you don't worry about it. But it's nice to see that somebody had the conviction to buy that big of a uh of a position in Ibit and to hold on to it.