PANews reported on June 6, 2025 that according to Cointelegraph, institutional holdings of Bitcoin ETFs witnessed their first – ever quarterly decline in the first quarter of 2025. The total scale dropped by 23% from $27.4 billion in the fourth quarter of 2024 to $21.2 billion. A report by CoinShares pointed out that this was mainly attributed to the 11% decline in the Bitcoin price during the quarter, rather than large – scale selling.
Notably, financial advisors bucked the trend and increased their holdings of Bitcoin ETFs, while most asset management institutions reduced their positions. Meanwhile, companies have continued to include Bitcoin in their balance sheets. By the end of the quarter, listed companies held a total of 1.98 million BTC, an increase of 18.6% compared to the beginning of the year. Among them, the Strategy company increased its holdings for 17 weeks out of 20 weeks leading up to June. On April 28, it purchased 15,355 BTC in a single day. Analysts believe that the rise in US bond yields may weaken the attractiveness of traditional safe – haven assets, which could provide support for the long – term trend of Bitcoin.
Data from 13F filings in the first quarter of 2025 also shows that the allocation of institutions to Bitcoin – spot ETFs has declined for the first time since their launch. This data marks a change from the strong initial inflows after the funds were launched in January 2024. Hedge funds have reduced their exposure, and the futures – based arbitrage trade that initially drove demand has begun to unwind.
Millennium Management, formerly one of the largest institutional holders of iShares Bitcoin Trust (IBIT), slashed its position by 41% and exited its stake in the Invesco Galaxy Bitcoin ETF (BTCO). Brevan Howard also reduced its exposure, and the State of Wisconsin Investment Board sold its entire 6 – million – share position in IBIT. These moves are in line with the collapse of the BTC futures – based trade, which became less profitable by late March. The annualized premium of CME futures over spot prices, which encouraged long – spot – ETF and short – futures pairings, fell from around 15% earlier in the year to near zero by the end of the first quarter.
Despite the pullback among fast – money managers, other long – term allocators have initiated or increased their positions during the same period. Abu Dhabi’s Mubadala Sovereign Wealth Fund has increased its IBIT stake to 8.7 million shares, estimated at $409 million. Brown University has added a $4.9 – million position, and filings also show modest entries from various endowments and sovereign entities.
The cooling of institutional interest is consistent with the daily ETF flow data. On June 5, US – listed Bitcoin – spot ETFs recorded net outflows of $278 million, marking the fourth day of outflows in the past week. The softening of institutional holdings does not seem to have affected the overall inflows, with year – to – date net inflows totaling $9 billion, compared to more than $44 billion in net inflows since the launch of ETFs.
The futures – based arbitrage trade, which was widely popular in the early months of ETFs, has become less attractive due to increased market participation and more efficient markets, limiting its appeal to leveraged players. Although 13F filings only provide a partial picture, covering US – based firms managing over $100 million, they offer insights into the changing nature of ETF exposure. Importantly, they do not capture offshore flows or smaller advisors and may underestimate the long – term interest that is still building up. Some exposure will also shift from ETFs to other instruments, such as CME futures or over – the – counter swap structures, which are not visible in these disclosures.
Furthermore, public companies are increasingly considering holding Bitcoin directly on their balance sheets in the form of strategic reserves. For example, the Trump Media Group and GameStop are committed to directly holding the top digital asset rather than purchasing it through one of the nine newly – launched ETFs. The total assets in the Bitcoin – ETF ecosystem remain substantial, with a combined AUM of over $120 billion. However, the changing investor mix suggests that the rapid early growth driven by arbitrage – driven funds may not be sustained at the same pace. The data in the first quarter marks the first clear slowdown in the Bitcoin – ETF era, as hedge – fund allocations decline due to changing market conditions and the unwinding of short – term strategies.
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