Institutional investors cut Bitcoin (BTC) allocations in US-based spot exchange-traded funds (ETFs) during the first quarter after hedging profits waned and futures premiums compressed, a June 5 CoinShares report showed.
The report assessed 13-F filings from asset managers with at least $100 million in assets under management. These investors reported $21.2 billion in Bitcoin ETF exposure as of March 31, down from $27.4 billion registered in last year’s fourth quarter.
Pullback in ETF exposure
The 23% pullback outpaced the 12% slide in the overall ETF market’s assets under management and came as Bitcoin dropped 11% over the period.
CoinShares tied most of the reduction to hedge funds. Those firms trimmed holdings by almost 33% after the decreasing appeal of the basis trade, which captured wide spreads between futures and spot prices throughout 2024.
Advisors moved in the opposite direction. Dollar-denominated stakes decreased in value, yet Bitcoin-denominated positions increased, lifting advisors to 50% of all filer assets.
Meanwhile, Hedge funds slipped to 32%, and brokerages held 10%. Advisors also dominated headcount, accounting for 81% of the 755 managers that disclosed Bitcoin ETFs.
Despite selling, professional investors still commanded nearly 23% of Bitcoin ETF assets, a modest decrease from the 26.3% share reported in the prior quarter.
CoinShares framed the decline as tactical rather than structural, noting that average portfolio allocations sit below 1%. The firm expects larger institutions to build positions once regulatory guidance stabilizes, internal committees approve crypto mandates, and education gaps close.
ETF concentration remains high
Filers kept a tight focus on three products. BlackRock’s iShares Bitcoin Trust (IBIT) carried $12.7 billion from professional investors, or almost 33% of the ETF’s assets. Fidelity’s FBTC followed with $3.6 billion, while Grayscale’s converted GBTC held $2.2 billion. Together, the trio account for 85% of institutional ownership.
Quarterly flows reflected that hierarchy. BlackRock drew fresh capital from Goldman Sachs and Macquarie, which opened or expanded positions worth $206 million and $136 million, respectively.
Hedge fund heavyweight Millennium Management reversed course, slashing $980 million, and Bridgewater-style advisor Bracebridge Capital liquidated $335 million.
Wisconsin’s state pension fund sold its entire $323 million stake, while Abu Dhabi’s Mubadala sovereign fund lifted holdings to $411 million.
Institutional retrenchment contrasted with corporate treasury accumulation. CoinShares estimated company treasuries increased Bitcoin reserves by 18.7% year-to-date, reaching 1.98 million coins in mid-May.
The report noted that corporations emulated Strategy’s balance sheet strategy. At the same time, professional asset managers opted to lock in gains earned since the launch of ETFs in January 2024, following Bitcoin’s crossing of the $100,000 mark in February.
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