The share of professional investors holding spot Bitcoin ETFs in the US declined significantly in the first quarter of the year. According to CoinShares data, the total asset value of these groups decreased by 35% to $17.8 billion. During the same period, the share of institutions making 13F declarations in total US Bitcoin ETF assets decreased from 24.7% to 20.8%.
Hedge funds and brokerage firms were at the center of the sales
The report stated that the withdrawal was especially concentrated in short-term and transaction-oriented institutions. CoinShares digital asset analyst Matt Kimmell stated that the data is consistent with the picture previously seen in the Bitcoin market during periods of decline.
CoinShares analyst Matt Kimmell stated that these data coincide with the structure seen historically in the Bitcoin market during periods of decline, and that leveraged and tactical strategies dissolved in this process.
Approximately 96% of the decrease was due to hedge funds and brokerage firms. Hedge funds reduced their Bitcoin ETF position by 31,400 BTC, shrinking it by 39%. In brokerage firms, the decline reached 18,800 BTC and the decline rate in this group was recorded as 53%.
On the other hand, the picture has changed more limitedly for some investor groups with a longer-term approach. Investment advisors, the largest group among professional investors, retained 150,300 BTC but reduced their exposure by only 5.9%. Banks, on the other hand, more than doubled their Bitcoin ETF holdings by adding 7,800 BTC during the quarter.
A decline occurred simultaneously with the price decline
The decline in professional ownership coincided with the sharp correction in Bitcoin price. Bitcoin lost 22% in the first quarter and briefly fell below $60,000, continuing the decline that began in late 2025. At its lowest point, the asset is down nearly 50% from its all-time high of over $126,000 in October 2025.
This outlook indicated that a significant part of the selling pressure may have come from actively trading institutions. Particularly the shrinking of positions by hedge funds and brokerage firms showed that ETF-based Bitcoin demand has become more fragile in the short term.
A more positive framework emerged on the regulatory front
CoinShares also emphasized that despite market volatility, there were some regulatory developments in the first quarter that could be supportive for the digital asset industry in the long term. These included work by U.S. regulators to make clearer the separation of oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission, as well as proposals for how digital assets could be treated in retirement accounts.
Mini-dictionary: A 13F filing is a formal filing in which institutional investment managers over a certain size in the United States regularly disclose their stock and certain securities positions. These notifications are used to track the extent to which large investors hold positions in which assets.
The regulatory agenda remained active in the period after the first quarter. The SEC included digital assets among corporate priorities until 2030 in its draft strategic plan published this week. The document included the goal of establishing a consistent, principled and clear regulatory basis for digital assets and distributed ledger technologies.
In its draft strategic plan extending to 2030, the SEC stated that it aims to establish a solid regulatory foundation with a rational, consistent and principles-based approach for digital assets and distributed ledger technologies.
CoinShares also noted that acceptance of Bitcoin in traditional financial institutions is increasing. BlackRock also stated earlier in the year that Bitcoin could play a role in modern portfolios, arguing that the classic stock and bond diversification model has become less reliable in the post-2020 investment environment. On the other hand, market participants continue to closely monitor the fate of the CLARITY Act proposal, which is expected to create a more comprehensive market structure framework for digital assets. While the current version of the bill is subject to review by the banking sector, some MPs stated that the proposal could come to the Senate agenda in August.
