The Wolf Of All Streets - Bitcoin Just Absorbed A $1.29B BlackRock Dump & Barely Flinched

Episode Date: May 27, 2026

Bitcoin is bleeding as a single whale dumped $1.29 billion of BlackRock's IBIT in a dark pool trade, pushing spot ETFs into a seven day outflow streak totaling $2.26 billion over two weeks. CryptoQuant's demand gauge just collapsed to its worst level since December and the Coinbase Premium has gone negative, proving this rally was leverage driven with no real spot bids underneath. We're breaking down whether BTC defends $75K or rolls over to new lows, what Warsh's hawkish pivot means for risk assets, and why the smart money is suddenly running for the exits. Learn more about your ad choices. Visit megaphone.fm/adchoices

The big headline right now is that Bitcoin just absorbed a $1.29-billion single dark pool dump of Black Rock's ETF. Now, obviously the news is reporting how big the dump was, but I think the bigger story, as I said there, is the fact that the market barely reacted to it at all. We're going to talk about that and everything else happening in the news with my friend Tom Dunleavy right now. Let's go. What is up, everybody? Happy Wednesday and welcome to the show. I'm going to bring on Tom right now. Good morning, sir. How are you? Fantastic. How about you? I am doing well. I had you on a little lag there, but I think it's working. I'm working through, as I told you before, some very robotic issues in my sound. So I'm hoping you sound normal to everybody else because I'm a little

already got to a Mr. Robato to me. So, hey, let's start with the first story of the day, because this is obviously the big one that's being reported pretty much everywhere. Whale alert, someone dumped $1.29 billion of BlackRock's Bitcoin ETF in a dark bull trade. So I'm seeing this reported everywhere, but to me it seems like the bigger story is that there were still only $122 million in redemptions. And this is a $1.29 billion sale. So somebody bought and held the bulk of this. Yeah, exactly. So

I think it's totally fine. These are normal market movements, especially when you have an asset as large as BTC. This is a macro asset now. So folks are trading this based on macro activity, and that's how you're going to see these trades going forward. I think these news stories are actually pretty worthless now going forward, now that you have BTC this big. If you were to say, you know, S&P 500, you know, someone trades a $20 billion contract on that,

you know, it would be a nothing burger. No one even make that story, right? Just because it's BTC folks are doing this. We're still trying to conceptualize this as a macro asset now. So, you know, for me, unless this number is 5, 10, 20 percent of overall, you know, assets for BTC or ether, or whatever, ETF we're talking about in crypto, then to nothing burger. Yeah, I just find it interesting. I mean, once you get to kind of bring it back up there.

The whole story here was that this was in a dark pool trade, which means basically privately done off exchange, not to move the market. Alex Thorne from Galaxy said it was by far the biggest he's ever seen of this kind. I mean, one of the mechanics of this, I don't know if this is your kind of core competency, but it seems like for there to be a private seller, there has to be a private buyer, right? That could be one of many people. Some sort of sovereign or big entity that actually wants to hold, and they're doing it as a slight discount or something over the counter.

I don't really know. Or it could be a market maker who has some neutral strategy, but you'd think it was a market maker, they would have, you would have seen it on the other side. Like they would be, you know, buying it and then selling it. Yeah, market makers are less concerned. about revealing who they are because they're usually large regulated entities that are fine expressing what their overall position in book is because it's generally pretty short term. Now, you hit the nail on the head, right? If you're going into a dark pool, a dark pool is just a big pool of assets on both

sides that obfuscates who actually has what and in what size. So you can enter into a dark pool, but you need to have a buyer and a seller on both sides of the equation for whatever asset you're trying to transact in because it's basically just a bilateral exchange of assets. So if someone is dumping, if this whale is dumping $1.2 billion with the Bitcoin, someone, presumably of the Bitcoin ETF, someone else is presumably buying it on the other side or they couldn't complete the transaction. So yes, it's just a transaction and likely a transaction to, you know, a longer term buy and hold, you know, individual of Bitcoin.

So again, nothing burger for me. I mean, how are you viewing the market in general right now? I mean, maybe that's a better place to start. Obviously, we've been chopping sideways volatility, I think, is at 90-day lows. Nothing happening. Now we're post-memorial day, right? So the sell in May and go-away crowd should be done. We kind of alluded to before we were on camera at the summer, always being sort of slow.

I mean, what do you think is happening here? Yeah, so summer is always slow on the venture side. So if things don't get funded in pre-seed, seed, early stage, you know, things don't really, new coins don't come out in the fall. So that cycle kind of slows down a bit. Markets, sell in May has generally held true, particularly in crypto markets over the years, as folks kind of moved away. And what I'm more concerned with actually is the broader consolidation of crypto markets in general. So we're at this one point in the cycle where we don't know whether to go up or down. And frankly, I think most of it has to do with all the boring stuff,

you know, regulation, clarity, war, blah, blah, blah, a lot of macro stuff we really can't control right now. But if you're looking at this asset class from an outside perspective and saying, how do I get involved in size outside of BTC or ETH, there's like 10 to 15, 20 assets maybe you can buy. So I think there's more just like an apathy on the asset class itself outside of the majors, which is really concerning. And I'm not sure how we support, you know, valuations for everything outside of what's called BTC, ETH, Seoul and hype without new and interesting investors coming into the asset class. And we're not going to do it in the summer, whenever we're kind of steps away from the desk. So I think this is a great time over the next few months that kind of

reframe the narrative and, you know, get clarity on track, get, you know, some new and interesting tokens launched. And then going into the fall, really have a refreshed crypto narrative that, you know, folks can be excited about. Yeah, I mean, you tweeted something. I don't have it in front of me and I responded, something about hyperliquid and Zcash, maybe, you know, like, is it me or is everybody, you know, in these? And I kind of jokingly responded, like, there's 500 people here. They've all decided those two things are going to go up and that's all that's left. Yeah. So we have a hedge fund arm and we do a decent bit of trading and just talking with our peers.

It's funny. You talk to anyone who has, it's called it 10 million plus right now. And they talk about position sizes that they actually try to get. You know, if you want a $1 million plus dollar position all the way, 10 million plus, you really can only allocate to, to call it max 50 names. And even if you're looking at those 50 names, just looking at the coin, you know, get out of top 100, look at the top 50 names, look at the top 100 names. Some are stable coins, some are meme coins, some are random assets you've never even heard of. And you kind of keep

whittling the list down to like, okay, here are the things I can like fundamentally underwrite whatever your underwriting criteria is, cash flows or TVL or activity or whatever it is, or network growth, great. And then you come down to a list of like five to 10 names, maybe, if you're lucky. And most of the hedge funds that I know and that we know have basically just ridden this hype train up. I mean, they've owned other assets, of course, but look at the performance of other assets. You have drastically underperformed everything if you haven't owned basically hype and Zcash. So in our view, in my view, the past 18 to 24 months has basically been a long hype and Zcash trade, which is exciting because it actually hits on two fantastic

narratives in crypto, right? Censorship resistance. Awesome for the Zcash crowd. Also maybe for the Ethereum crowd down the line. And then, you know, hyperliquid, real revenue generating application that is being used by traditional finance allocators being, you know, is being talked about by traditional finance folks and used by them. So great narratives, but those are the only two assets. So, you know, I think the breadth of this market and the crypto market more broadly is really been concerning for me as it's, and if this continues, we're just going to be effectively absorbed into broader tech, which may be fine for some people, but certainly not for the crypto, you know, ideologues who started this industry. Yeah, I mean, this week, the narrative's been

the brain drain over at Ethereum, right? So Ethereum's identity crisis is deepening. After high profile, brain drain frustrates the community. I think they had like five key figures leave from the Ethereum Foundation just this month, eight maybe this year. And of course, Vatolic kind of finally stepped out and talked about, you know, Ethereum. becoming a smaller ship. The Ethereum Foundation owns a fraction of a percentage of the Ethereum at this point. They're not going to sell. He said that they're just one node among many and said, you know, they're going to basically

focused on privacy and not try to win the war for speed and fees. This is what you said, right? Super bullish on the privacy push for Ethereum, but it needs to happen in a reasonable under 12-month time frame or it effectively doesn't matter. Ethereum now more than ever is in a race on the product side, and its competition is extremely well-funded, motivated, and has all the connections, Ethereum wax. ship or die, small ship or die, I guess. Okay.

Yeah, so there's a number of things here. So who is Ethereum competing against? And right now it's competing against broader Wall Street and then newer chains like Canton. And it's funny because we used to talk about, you know, Monad and these others who are coming out or Solana. And it's really not even a conversation anymore that may change in the future. It seems like Ethereum is sort of meeting the bar when it terms in terms of speed and cost

that we were worried about for so long. And now the bar is really, how many assets can we get? on chain and how can we support them. So I think the pivot in the EF is somewhat concerning. I've talked to folks and projects who have actually actively gone out and have Vitalik on their cap table. And they're like, hey, can we figure out how to, you know, talk about Ethan a positive light or, you know, talk about our project to get more eyeballs on it. And he's like, you know, sort of why? So, you know, I think, and I think that's the broader consensus among most of the EF right now is why do we have to think about these things as assets when they're you know we're trying to build a censorship

resistant network for the next hundred years which i think is and i think everyone now recognizes is just way too far-sighted and if you lose the race in the next one to two years you're not going to have a race for the next 100 years so we need to ship useful production level improvements to the network and for builders to come on board in the next you know 12 months max so privacy is one of of us. I think privacy is fantastic. Obviously, Canton has leaned into that. There are a number of protocols on Salana who are leaning into that. Theorem has talked about building it into the network. Fantastic start. I think that's great. Other ways to grow the network, certainly building out some investor relations or BD functions. I talked about this. I think when I was on the show with you,

like 12 or 18 months ago when I was in Washington chatting with folks there. And they're like, great, I know who to talk to for Salon. I know who to talk to for Avalanche. I have no idea who to talk to for Ethereum. So how do I like advocate or, you know, get some of the United States. someone to advocate for Ethereum if I don't know who to talk to. And we tried that with Ethereumize, which has seemed to be, you know, somewhat successful in terms of some of their mission chatting with folks on Wall Street, but hasn't really succeeded. So I think there needs to be reckoning. So it's great.

We're kind of reshuffling the deck. Now, I hope reshuffling the deck at the EF doesn't mean that we're going even further down the path of we don't really care about the price of the asset. We're just going to continue to build censorship resistance technology because there does need to be a sense of urgency. The urgency is real because the competition is real. Right. I mean, it seems like they're not competing in any of the main narratives. Obviously, I think it set the world on fire. It's funny to even talk about this. But David Hoffman, obviously, from bankless, you know, bankless built their entire brand,

their funds, their everything around Ethereum as ultrasound money. Nothing against them. I just thought the notion of Ethereum as ultrasound money seemed like something that was just proposed to trigger Bitcoin Maximus. I said double-liss is something like that. We'll pick off the Maximilist the most and they went where Ethereum is ultrasound money, right? And so, you know, going through kind of how why he said why he sold his ETH and they're pivoting, A, like this feels like a classic bottom signal, nothing to him. But when somebody, you know, who's been the biggest proponent or believer in something capitulates,

you have to pay attention that you might be bottom signal. They basically said that his thesis of ultrasound money sort of failed, which is why he was holding the token, but he still believes in the Ethereum. network. I can actually get behind like Ethereum could succeed, but the token may underperform narrative for almost any token. Yeah. So I've vehemently disagreed with, so the root genesis of ultrasound money is that network transactions or fees or other things that contribute to the ETH burn actually reduce the level of ETH the asset as it is burned over time. And that leads to some money-like characteristics that are even better than dollars or whatever

you want to spend. I always thought that was silly. You know, it's very, very well established in traditional finance. And folks have been trying to kill the dollar for decades and decades that it's just really, really hard to make it happen. And that's for a number of reasons, including that it's tied in most of the world's debt, you know, oils denominated in dollars, et cetera. We're not getting oil denominated in ETH. Folks try to tie that to like, oh, we have NFTs in ETH, now ETH is money. Okay, that was always silly

to me. What is really mattered always is the overall value that the Ethereum network itself is securing. So how many RWAs, how many stable coins, how many overall dollars and applications that network is securing and the security properties involved downstream because of that. And I know it's a bit of an esoteric and tricky argument. I want to come out with a detailed piece later to kind of walk it through folks, walk it through for folks because I know it is a bit trickier than, hey, let's do a DCF on this thing. I think that makes no sense, especially for a network that has the whole property

and the whole point of these networks is that you want them to be faster, cheaper, more efficient, less censorship resistant than the, incumbents are today. And you can't do that when you have a higher level of fees just to satisfy some simple DCF calculation. So you need to value it, in my opinion, on the security of the asset itself and what that means. And that's unique for proof of stake networks. So when we try to compare these things to DTCC or to Lenox or whatever, again, it makes no sense because these networks, those networks do not have assets that secure them fundamentally. So a bit of a tricky argument, but I think there is some arguments for Ethereum still, and I'm still absolutely good.

I'm not really shaken by this. Like I said, I think it's more of a bottom signal. But listen, I mean, factually, it's languished. I mean, in price, factually, the Ethereum Foundation has consistently shot themselves in the foot and not helped. So I think them getting out of the way and saying this is going to be more decentralized, we're going to play a less active role. And allowing Ethereum to become what Ethereum can be is probably a net positive. But as you said, it has to happen fast because the competition is not going anywhere.

and those narratives are only, you know, picking up steam, I think, on Wall Street. And Ethereum had really a Goldilocks moment where, you know, the ETF were approved after Bitcoin, which people didn't think was going to happen. And, you know, you've had Black Rock pounding the pavement using BUIDL and building on Ethereum. So it is the time for them to get their act together. But I do like your kind of take that the best way to value it is TVL, right? And I think it still dominates every other chain in total value lot. 53% TVL, 57% of stablecoin activity, 64% of RWA activity.

And this is why I made this statement. If you think that crypto fails, crypto fails. Like full stop. I mean, we can grow away out of it and other networks if that's your conjecture. We've tried that for five plus years and it has not worked. Ethereum has dominated all these metrics consistently for that time period, despite the network activity growing, whatever metric you want to use as a huge pie. overall 5x plus across chain. So, you know, I continue to think if you're betting against Ethereum,

you're betting against crypto. That makes sense to me. I think I agree with that. From a personal perspective, you know, business perspective, obviously, you know, you've done liquid funds VC, you've kind of worked all across the board, obviously, research at Misari for all those years. What are you seeing people actually interested in? What's coming across your desk? You know, where, where are checks actually being deployed right now? Is it strictly into those narratives that you mentioned earlier because we have hype and Zcash? Are there things, you know, still in Web 3 that are bubbling that nobody's talking about? Yeah. So to my earlier point about privacy, there's a ton of privacy protocols already in production or coming to TGE or being built today. So that's a huge,

huge narrative. I think folks recognize that that's a potential issue. And something that actually crypto does that is really hard to do in traditional finance outside of those. those dark pool structures that we mentioned. There is collectibles, which I think folks are really excited about. And my previous fund, we invested in collector crypt at Precete, and that's been one of the shining examples of revenue. And that's where I think revenue is going to be really important, just to be clear.

Revenue is not important at the base layer. It's very, very important at the app layer. So that's why hyperliquids create, collector crypt create, all these other app, polymarket, great example. Great to make money at the app layer. So collector crypt and other collect, collectibles exchanges. We've seen a number of those, you know, things that solve inefficiencies in traditional markets, which if you're a collectibles person like I am, you can see the inherent advantages of being on chain. Most of these transactions still occur on eBay. So that's really challenging. We've seen other examples, mostly in trade finance, which are not going to be super exciting for people, still around stable coins, but mostly outside the U.S. So stable coins in Europe, stable coins of Latin America, banking there, including a number of

opportunities for fully integrating the stack from everything, from releasing your own stable coin to on and off ramping, to build in relationships with customers, kind of like the NeoBank route, a lot of different interesting plays there. And then finally, you know, there's some new and interesting things happening more on the consumer side alongside collectibles around sports, around events and things like that. But, you know, mostly VC activity continues used to be on the more tried and true boring stuff, which is stable coins, remittances, and just taking the playbooks that have worked and moving them into different regions. And to me, that's mostly because the folks who are still around are the folks who have

invested in that thesis early and have had the sort of selection bias that they're still here by not investing in the super speculative stuff. So unfortunately, or fortunately, there's not a huge amount of speculation on the, or creativity, frankly, on the venture. I signed in the early stage right now. I mean, for people who have raised a ton of capital, maybe they're not that many of them, I don't even see how you deploy it.

I remember last cycle, it'll be like, Andresen raises $3 billion fund. I'm throwing a number out of thin air, you know, but a $3 billion fund for crypto startups, and then you look at what's being presented and they're like doing like $1 million rounds. So they can get $500 grand in there and have another, you know, 3.0.3.

5 billion or almost 3 billion left to deploy. It seems like it would be very, very challenging right now to even be a VC and that you would have to over deploy into the few ideas. Yeah, most of these, so the strategy right now, so most of these guys are able to deploy into liquids, which is a positive. They have flexible mandates so they can deploy into other things that are call it crypto-adjacent. So you've seen a lot of AI deals. They've been very active in the secondaries markets. And then they're doubling down on their early stage winners. So they will write checks for five to ten million dollars. The one million dollar checks are really tough, right?

If you have even a $500 million fund, that is a lot of checks. But you might write it with an eye to like, hey, I'm writing a million dollar check today if I can write a $20, $30 million check down the line. So it's still consolidating, though, for sure. Yeah, seems, seems challenging. It seems like we're really reducing ourselves to just a few narratives here. Yeah, it does. And I think some of those narratives are exciting.

And this is what happens as you mature as an industry. You can't keep having these crazy, we can at the margins, but you can't have crazy esoteric technologies be part of your core mission as an asset class because you just don't have enough marginal buyers to support that. So, like, yes, meme coins are fun, but how many people in the world want to punt off on a meme coin? and how many people in the world who are doing that have other opportunities through gambling or lose their money and want to circle back.

And you're sort of seeing this even with really good products like Polymarket. So there was a report the other day that I think it was 70% of profits on Polymarket accrue to 1% of users. I think you might be quoting it right. My brain had it like over 90% or something. All I knew is it was absolutely absurd. And clearly it's all fixed insider trading sharps who are just cleaning up on those markets. Even as gratuitous as meme coins. Yes.

Worse. Worse. And they proxy it versus like HFT and like commodities trading, like a number of different metrics. And it was like the top 1% 8 and the top 0.1% 8 even more. So, you know, this is this is the feature of a new market. And if you listen to the sports betting podcasts or the folks in that side of the equation, that's actually where a lot of it's coming from because they got limited by books. They didn't have any outs.

And now they have this huge open ocean of all these fish. It's like the early poker days. It's like, you know, if you were a sharp and you walked into, you know, a room, you were like, okay, we find where the table where the fish is. And it's like, okay, Polly Market and Kalshi have all the fish from all the sports betting. And that's still where a majority of the volume is. So they just came in and cleaned up. And it won't happen forever.

but for now, that's generally where it is. So, you know, it's still very speculative. Now, does this mean, and I know we're painting a sort of a dour picture? Because you never know where the innovation is going to come from, right? It's like the old example, oh, you know, when you gave me an iPhone the first time, I didn't envision like, you know, maps and Uber and what, you know, angry birds or whatever. It's the same thing with crypto. Like, you have to build this fantastic set of rails. You have to build interesting, you know, technology at the base layer for folks to actually experiment and build on. Now we've been battle tested for a number of years. And I think that's finally coming with some applications. You know, pumped up fun was probably one of the first one of those, polymarket, another one, great. And

these are all still at the core gambling. So I think eventually we'll get at the core, trade finance, you know, assets on chain, portfolio management, et cetera, things that normal people want to I found the article. So you're right, generally. 70% of polymarket traders lost money. So that's one side of it, which I find low. But top 0.04% captured most profits. So 70% of the money also captured by 0.04%, not 0.4% or 4%. 0.04%. I mean, that's, I would love to see the data on even the most manipulated meme coins on who made the money and who lost the money. And if it's better or worse than that. But like this is, you know, and then you're like, these are the facts. And then, you know, you have Trump like freaking out today.

You know, it's critically important that CFDC exclusives over the authority over prediction markets. Okay, because obviously, you know, the states are saying this is gambling. And the federal government is saying these are basically derivatives contracts. It should be federally. And I understand that fight. But like at the same time, you know, we saw Trump meme coins launching and we know he profited from those. And Donald Trump Trudeau is on the board of both Calci and Bolly Market, right? And Trump, Truth Social has their own prediction market.

business. It's like, where do the, you know. Yeah, it's amazing we've received help from the administration, but it's also kind of shocking at the same time, the level of deep ties to a lot of these organizations. The polymarket numbers are just as bad as those numbers say, and probably even worse if you consider for polymarket, the numbers are 40 to 50% sports betting. And then if you add in those like stupid 15 minute, you know, bets on BTC, like will BTC be this price range in the next 15 minutes? In aggregate between that and sports betting, that's like 70% of their volume on polymarket. Kalshi, even worse.

It's like 70% sports betting, 20% of that other nonsense. Not betting. It's not betting. If it's sports betting, then the states get to regulate it. It's not betting. Not betting. I forget what they call parlay. another name for them all of a combination combination can lay something with a bunch of alliterative

c's yeah and i think um the the states so that's the next battle for these guys which is not going to be for another until next year so you know that's another supreme court case we're going to have to deal with as an industry but um hopefully by then we'll have found some new and interesting applications this fall and beyond uh i overall this is the this is a great brush clearing the past six months Yeah, I think actually, like, you know, you can paint it either way, but I think this consolidation into things that actually make money and people can value and you can sleep at night holding probably is a very net positive development for the future. It just feels bad now because we're still, as you said, sort of burning the brush fire. 100%. So value revenue users, traditional metrics on the application layer.

If you're investing in base layers, I think you need to think of new and interesting frameworks because these are new and interesting assets. It only applies to like four or five of them. So the rest of them, great. Use all your traditional metrics because I think they apply. Now we just need more interesting companies to actually fulfill them. And then downstream buyers like hedge funds and asset allocators and things like that, not buying through crazy and silly vehicles like DATs and others. So I think we'll get there.

I think we're there on the base layer side. And I think the application side is certainly on its way and coming. We now have examples we can point to. We have pumped up fun, whatever you think of that. We have Polymarket. We have CalShe. There's a lot of caveats in the revenue, of course. You know, we have, you know, all these others that, you know, hydroliquid, of course.

We have these others you could point to. You could point to at least five or six protocols with really, really meaningful revenue, collector crypt, you know, that are doing real things that you couldn't point to last year, which is a positive. And that's something we should all be excited about. Agree. On both polymarketing and CaliQI's sports make up the vast majority of all betting volume with sports contracts, probably roughly 70 to 90% of total trades on the platform.

forms, a breakdown of the bit. I mean, Cal she says it's about 90%. Listen, for better or for worse, I can see why the Draft Kings and Fandual guys and such are freaking out because they've fought so hard against regulation and to get the, you know, basically casino licenses to be sports books and all these places. And then someone comes in with a different product that's effectively exactly the same. It is not, uh, is not privy to any of the same rules. I mean, I've seen Matt Kaelish from draft Kings just like going absolutely ballistic and even that the odds change on you depending on size and sort of these crazy accusations. Yeah, it's going to be an interesting fight. And to be honest, what's going to happen

is just Draftcans and Fanduil and stuff are just going to launch prediction markets. They have already. Right. They've been enormously, they've failed. They launched them, yeah, three or four months ago. Yeah, exactly. That's why they're mad. And I do think Polymarketing and Cal She both have really interesting use cases. We need to be eyes wide open about what they're being used for. I think that the ability to hedge using these things, the accuracy on election results versus actual exit polling and stuff, incredible. I think this is just going to have to find its way, as you said,

through the courts and what they can and can't do and who can regulate them. 100%. All right, man. Well, I appreciate it. As always, you joining. Good to see you and talk to you. Hopefully we can do this again in person sometime. in the near future.

For sure. Good catching up and good to see the audience and everyone and we'll talk soon. Yeah, everybody give Tom a follow there at Dunley v-89 and I'll see you guys on the Daily Wolf at noon. Thanks, ma'am. Bye.