Institutional selling of spot bitcoin exchange-traded funds during a bitcoin downturn was concentrated among some hedge funds and banks.
On Oct. 28, blockchain media outlet Decrypt reported that Galaxy Research confirmed the trend by analysing quarterly 13F institutional holdings disclosures filed with the U.S. Securities and Exchange Commission.
Spot bitcoin ETF holdings by 13F filers, measured in bitcoin, fell about 14 percent to 307,000 BTC at end-June 2026 from 355,000 BTC at end-September 2025. The decline was concentrated among a small number of institutions.
Millennium Management, Brevan Howard, Goldman Sachs, Capula Management, Farallon Capital, D.E. Shaw, Schonfeld Strategic Advisors, Symmetry Investments and Tudor Investment cut a combined 68,000 BTC in ETF holdings. The reductions ranged from 29 percent to 100 percent by institution. That exceeded the net decline of 48,000 BTC across all filers, as other institutions were estimated to have increased holdings by a combined roughly 20,000 BTC.
Institutions that increased holdings included Morgan Stanley’s wealth management unit, Abu Dhabi sovereign wealth fund Mubadala and the Abu Dhabi Investment Authority. Holdings among advisers, family offices and individual investors that do not file 13Fs fell by only 6.6 percent. Over the same period, bitcoin’s price fell 49 percent.
Galaxy analysed the selling by some institutions as driven more by worsening arbitrage profitability than by bearishness on bitcoin. Many of them have used a “cash-and-carry” strategy that buys spot ETFs while selling bitcoin futures on the Chicago Mercantile Exchange to profit from price differences.
But incentives weakened as the basis, the price gap between spot and futures, narrowed. In the 30 days just before bitcoin’s peak, the average annualised basis for front-month futures was 7.9 percent, 3.9 percentage points above the yield on 3-month U.S. Treasuries. By the 30-day average through Oct. 21, it had fallen to 4.8 percent, and the gap versus Treasury yields narrowed to 0.6 percentage points.
Longer-dated futures also offered limited profitability. As of Oct. 21, the annualised basis for November and December contracts was 6.3 to 6.5 percent, about 2 percentage points above Treasury yields. But after accounting for ETF fees, futures roll costs and margin burdens, the excess return over cash was estimated at about 1.5 percentage points. Galaxy assessed that returns at that level make it difficult to take on extreme market volatility risks.
Position reductions also appeared in the futures market. The U.S. Commodity Futures Trading Commission said asset managers’ net long positions in CME bitcoin futures fell 57 percent to 18,400 BTC from 43,300 BTC in the week bitcoin hit an all-time high.
By contrast, spot ETF holdings were relatively resilient. Total bitcoin holdings across all ETFs fell 11 percent from the October 2025 peak to the July 2026 trough, far less than bitcoin’s 53 percent price decline over the same period. Since June, when bitcoin hit its low, ETF holdings have risen by 87,000 BTC and leveraged funds’ net short futures positions have declined. Galaxy analysed the trend as showing buying increasingly weighted toward expectations of bitcoin price gains rather than arbitrage.