Market Reaction to Major Trades
This massive trade significantly impacted the market. Within just ten minutes after the large-scale sell-off, the price of Bitcoin plummeted by 1.5% from $77,875 to $76,720. The market remained under pressure, and after twelve hours, Bitcoin further declined to $75,600, ultimately resulting in a daily loss of 2.8%.
This unprecedented trade is considered one of the largest dark pool trades in history, noted Alex Thorn, head of research at Galaxy Digital.
Ongoing Withdrawals from Bitcoin ETFs
The U.S. spot Bitcoin ETF has faced net outflows for eight consecutive trading days. On Tuesday alone, $333.6 million flowed out, with $192.4 million coming from BlackRock's ETF. Since mid-May, these investment vehicles have lost over $2 billion.
This trend indicates a waning interest from institutions in Bitcoin ETFs, suggesting that new capital inflows are unable to offset the ongoing withdrawals.
Wall Street institutions have also significantly retreated, with many drastically reducing their Bitcoin ETF holdings. For instance, Jane Street cut its holdings by about 70% in the first quarter of this year, while Goldman Sachs reduced theirs by 10%.
Bloomberg's Eric Balchunas emphasized that this massive order was 22 times larger than any other trade that day.
This dynamic has tightened the connection between Bitcoin ETFs and traditional financial markets. Once viewed as independent cryptocurrency values, Bitcoin is increasingly following the trends of the U.S. stock market, leading to heightened market volatility.