Q1 2025 According to submissions on 13F, the allocation of facilities to find Bitcoin ETFs has declined for the first time since its introduction. However, companies’ Bitcoin ownership shows no signs of a decline overall.
The data shows a shift from the strong early inflow following the fund’s January 2024 launch as hedge funds began to reduce futures-based arbitrages that initially accelerated demand.
Reduced institutional crypto ETF allocation
Millennium Management, previously one of the largest institutional owners of iShares Bitcoin Trust (IBIT), has reduced its position by 41% and terminated its stake in the Invesco Galaxy Bitcoin ETF (BTCO). Brevan Howard also cut the exposure, with the Wisconsin Investment Commission selling its entire 6 million share position at IBIT.
These moves were in line with the collapse of BTC futures-based trade, which had been declining by late March and enabled an Arbitrage-led strategy.
The annual premium for CME futures across spot prices, which encouraged a combination of long spot ETFs and short futures, fell from 15% early in the year to nearly zero.
Despite the cuts among fast money managers, other long-term allocators have started or increased positions in the same period. Abu Dhabi’s Mubadara Sovereign Wealth Fund has raised its shares in IBIT to 8.7 million shares, estimated at $409 million.
Brown University added a $4.9 million position, and the filing also showed a range of donations and modest entries from sovereign entities.
The interests of the cooling system coincided with daily ETF flow data. On June 5th, the US Spot Bitcoin ETF recorded a net flow of $278 million, marking its fourth day of last week.
The softness of the facility’s holdings does not seem to affect the flow, with net inflows totaling $9 billion since the start of the year, compared to net inflows of more than $44 billion since launch.
This base trade, widely popular in the early months of ETFS, was compressed into an increased participation and more efficient market, limiting its appeal to players whose appeal was exploited.
13F filing doesn’t convey the big picture
The 13th Floor filing only offers partial snapshots covering US-based companies that exceed $100 million, but provides insight into the changing nature of ETF exposure. Importantly, they do not acquire offshore flows or small advisors, and still refrain from long-term interest under the surface.
It will also move from ETFs to other equipment, such as CME futures that are not visible in these disclosures and commercial exchange structures.
Additionally, public companies are increasingly exploring the direct holding of Bitcoin on their balance sheets in the form of strategic reserves. For example, Trump Media Group and GameStop are committed to holding top digital assets directly, rather than buying through one of the newborn 9 ETFs.
Total assets across the Bitcoin ETF ecosystem remain substantial, with AUMs of over $120 billion. Still, the evolving investor mix suggests that rapid early growth driven by arbitrage-driven funds may not be maintained at the same pace.
Q1 data is the first clear slowdown in the Bitcoin ETF era, with hedge fund allocations falling as market conditions change and short-term strategies unlock.
The next 13F cycle in July will provide a clearer picture of whether long-range allocators will continue to intervene to fill the gaps left by arbitrage-driven trading.
