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The fourth-largest overnight repo operation since the pandemic, a gated retail credit fund, and a mysterious $436 million Hong Kong Bitcoin bet are reshaping how institutional money moves through US crypto markets.
Three developments converged this week to test assumptions underpinning US cryptocurrency markets. The Federal Reserve injected $18.5 billion into the banking system through overnight repos, Blue Owl Capital restructured investor redemptions at a retail-focused private credit fund, and a previously unknown Hong Kong entity disclosed a $436 million position in BlackRock’s flagship Bitcoin ETF. Together they paint a picture of liquidity stress, capital rotation and offshore demand pulling digital assets in contradictory directions.
The Fed Steps In — Quietly
The $18.5 billion overnight repo operation, executed on February 19, ranks as the fourth-largest such intervention since the Covid-era emergency measures of 2020. The New York Fed’s facility allows financial institutions to swap high-quality collateral for short-term cash, and while such operations are routine monetary plumbing, the scale caught funding-market watchers off guard. Bank reserves have been trending toward levels some analysts consider the practical floor for smooth interbank functioning, compounded by the Fed’s ongoing quantitative tightening programme that continues to drain roughly $60 billion per month from the balance sheet.
Blue Owl and the Private Credit Crack
Hours before the repo data hit screens, Blue Owl Capital announced that investors in its OBDC II fund would no longer be able to redeem shares through quarterly tender offers. The fund will instead distribute capital through periodic payments funded by loan repayments and asset sales. Blue Owl sold $1.4 billion in direct-lending assets across three funds to pension and insurance buyers at 99.7 cents on the dollar, with $600 million coming from the gated vehicle. Redemption requests had already breached the standard 5% quarterly cap, and Blue Owl shares fell nearly 10% on Thursday, dragging Apollo, Blackstone and TPG down between 4% and 8%. Defaults among middle-market private credit borrowers have climbed to approximately 4.55% — a backdrop that underscores how traditional finance stress bleeds into digital asset sentiment.
XRP Leads, Bitcoin Bleeds
While macro stress signals multiplied, capital rotation inside crypto accelerated. CoinShares data show XRP has been the top-performing digital asset investment product year-to-date, attracting over $109 million in cumulative net inflows through mid-February while Bitcoin products shed nearly $1 billion. Ethereum funds recorded $85 million in outflows in the most recent week alone. The divergence is structural: the resolution of Ripple’s SEC case in 2025 unlocked institutional access, and US-listed spot XRP ETFs have accumulated roughly $1.5 billion in total net assets. CNBC declared XRP the “hottest crypto trade” of 2026, and the token has overtaken BNB as the third-largest cryptocurrency. For traders navigating sharp declines in Bitcoin open interest to levels not seen since late 2024, the rotation reinforces a flight from crowded positions toward assets with regulatory clarity.
The $436 Million Hong Kong Mystery
Adding a separate layer of intrigue, a Form 13F filed with the SEC revealed that Laurore Ltd, a Hong Kong-based entity with no website and no public footprint, held 8.79 million shares of BlackRock’s iShares Bitcoin Trust valued at $436 million as of December 31, 2025. The filing listed a single director named Zhang Hui and showed IBIT as Laurore’s sole asset. Jeff Park, chief investment officer at ProCap Financial, described the structure as a Bitcoin access vehicle wrapped in an offshore shell — a common mechanism for investors in jurisdictions where direct crypto ownership is banned. China’s sweeping 2021 prohibition remains in place, and the PBOC reinforced it this year with directives targeting tokenisation and unauthorised yuan-pegged stablecoins. Whether Laurore represents mainland capital or a high-conviction Hong Kong allocator remains unconfirmed. What is clear is that the convergence of repo stress, gated credit funds and Bitcoin outflows describes a market where the capital is voting with its feet: away from Bitcoin’s crowded trade, toward XRP’s cleaner regulatory story, and in at least one opaque offshore filing, straight into BlackRock’s Bitcoin ETF.
