When you smell something in the air, it’s because scent molecules have dissolved into the wet lining of your nose. Smelling underwater is no different, except that the molecules are already dissolved in the seawater. It’s a myth that sharks can smell a single drop of blood from a mile away.
Sharks actually have roughly the same sensitivity as other fish and can detect smells at between one part per 25 million and one part per 10 billion, depending on the chemical, and the species of shark. At the top end, that’s about one drop of blood in a small swimming pool.