Institutional Investors Reduced Bitcoin ETF Holdings by 25,000 BTC in Q4 2025, Led by Hedge Funds and Advisors

Institutional investors filing 13F reports with the U.S. Securities and Exchange Commission reduced their aggregate Bitcoin ETF holdings by approximately 25,000 bitcoin-equivalent shares during the fourth quarter of 2025, based on Bloomberg Intelligence data.

The selling was concentrated among investment advisors and hedge funds, the two largest holder categories, while some government-related entities and holding companies increased positions during the period. The reductions coincide with Bitcoin’s price decline from over $120,000 to approximately $64,000 as of February 2026, with spot Bitcoin ETFs recording five consecutive weeks of net outflows totaling approximately $4.3 billion.

Q4 2025 Institutional Selling Patterns

Aggregate Reduction in Bitcoin ETF Exposure

Bloomberg Intelligence data shows that 13F filers—institutional investment managers with over $100 million in qualifying assets who must report quarterly holdings to the SEC—were net sellers of Bitcoin ETFs in Q4 2025, cutting exposure by nearly $1.6 billion in value terms. The reductions represent approximately 25,098 bitcoin-equivalent shares sold during the quarter.

The selling accelerated as Bitcoin’s price fell dramatically during Q4 2025 from an all-time high exceeding $120,000 to below $85,000 by quarter-end. The price decline has persisted into 2026, with Bitcoin changing hands at about $64,000 as of February 24, 2026.

Largest Seller Categories by Investor Type

Investment advisors recorded the largest net reductions, selling approximately 21,831 bitcoin-equivalent shares during Q4. Hedge fund managers followed with approximately 7,694 bitcoin-equivalent shares sold. Brokerages and banks also reduced exposure, though in smaller magnitudes.

Brevan Howard emerged as the single largest seller, reducing its position in BlackRock’s iShares Bitcoin Trust (IBIT) by approximately 86 percent during Q4. The macro hedge fund’s holdings shrank from about 5.5 million shares valued at approximately $2.4 billion to $275 million.

Investor Categories That Increased Holdings

Despite broad-based selling, some institutional categories added Bitcoin ETF exposure during Q4. Holding companies and government-related entities increased their positions. The Emirate of Abu Dhabi raised its IBIT position by 46 percent in the fourth quarter of 2025.

Investment advisors, despite being net sellers in aggregate, have demonstrated different behavior patterns over longer timeframes. Data indicates that investment advisors increased their aggregate IBIT positions every quarter over the past year, resulting in a 145 percent year-over-year rise, suggesting this category may represent more durable capital less prone to trading around short-term volatility.

Hedge Fund De-Risking and Basis Trade Unwind

Aggregate Hedge Fund Reduction

Hedge funds that helped fuel the U.S. Bitcoin ETF boom are rapidly exiting positions. Data compiled by CF Benchmarks, a subsidiary of crypto exchange Kraken, shows that the largest hedge funds’ aggregate Bitcoin ETF allocation dropped by 28 percent from Q3 to Q4 2025.

“The dominant theme over the last two quarters was hedge fund de-risking,” wrote Gabe Selby, Head of Research at CF Benchmarks, in a February 19 research note. “The October blow-off top appears to have triggered systematic position reductions.”

Basis Trading Strategy Dynamics

Part of the hedge fund retreat relates to the unwinding of basis trading strategies, which became one of the most popular hedge fund plays over the past two years. Funds purchased spot Bitcoin ETFs while shorting CME Bitcoin futures, capturing the premium at which futures traded above spot—a near-consensus carry trade requiring no directional price view.

For months following Bitcoin ETF approvals, annualized returns on the basis trade strategy often reached double digits. However, as of February 9, 2026, returns had declined to approximately 4 percent as more market participants crowded into the arbitrage opportunity.

Broader De-Risking Context

The selloff reflects both price momentum shifts and mechanical factors. Bitcoin has declined alongside—and at times faster than—the macro risks it was positioned to hedge, undermining the institutional narrative that it could offset inflation, currency debasement, or equity market stress.

The post-October rally pullback “appears to have triggered a systemic deleveraging,” according to CF Benchmarks analysis. Since October, with digital asset prices sliding and yields on once-lucrative trading strategies shrinking, fast-money investors have steadily cut exposure.

Ongoing ETF Outflow Trend

Five-Week Outflow Streak

The Q4 institutional selling has extended into 2026, with spot Bitcoin ETFs recording their fifth consecutive week of net outflows for the period ending February 20, 2026. The 12 spot Bitcoin ETFs shed approximately $316 million during the four-day week ending February 20.

Approximately $4.3 billion flowed out of spot Bitcoin ETFs during this five-week period, marking the longest stretch of outflows since the six weeks ending November 21, 2025. This contrasts with net buying of $4.3 billion in the same period of 2025, creating a $6.9 billion year-over-year buying gap.

February 2026 Outflow Details

On February 18, 2026, U.S. spot Bitcoin ETFs recorded total net outflows of $133 million. BlackRock’s iShares Bitcoin Trust (IBIT) saw the largest single-day net outflow at $84.19 million. Total Net Assets in Bitcoin ETFs remain substantial at $83.6 billion, representing approximately 6.3 percent of Bitcoin’s total market capitalization.

Over the seven days ending February 18, the total net outflow of U.S. spot Bitcoin ETFs reached 11,042 BTC, with only two trading days recording net inflows. February 12 saw a single-day outflow of 6,120 BTC (approximately $416 million), marking the largest outflow day of that period.

Market Impact and Price Context

Bitcoin Price Decline

Bitcoin’s price has fallen approximately 50 percent from its October 2025 peak of over $126,000. The cryptocurrency slid as low as approximately $64,300 in February 2026, its lowest level since February 6.

The selling pressure has pushed market sentiment into “Extreme Fear” territory, with the Crypto Fear & Greed Index registering at 32 as of February 2026. This reading reflects pervasive investor worry and risk aversion.

Exchange Flow Dynamics

Exchange net flows have remained positive (indicating tokens flowing into exchanges) for multiple weeks, contrasting with January’s pattern of negative net flows (tokens flowing out of exchanges). Since early February, exchange net flows have ranged from +391 BTC to +841 BTC weekly, with February 18 recording +553 BTC, continuing a two-week trend of positive inflows.

Institutional demand has not only failed to absorb new market supply but has itself become an additional source of selling pressure. The establishment of a positive accumulation trend would require at least three consecutive trading days of positive ETF net inflows and sustained negative exchange net flow indicating tokens being withdrawn for custody accumulation.

Countervailing Accumulation

Some investors have bucked the trend by adding during the downturn. Strategy (formerly MicroStrategy) continues to accumulate Bitcoin, holding approximately 478,740 BTC worth over $46 billion following its most recent purchases.

Investment advisors, despite recent selling, may represent stickier capital as such firms “don’t typically trade around short-term volatility,” according to CF Benchmarks. The research firm noted that over the past year, “speculative capital that powered the rally has retreated and in its place, a more durable ownership base has formed—and it’s playing out even as prices correct.”

Frequently Asked Questions

Which institutional investors sold the most Bitcoin ETF shares in Q4 2025?

Investment advisors recorded the largest net reductions at approximately 21,831 bitcoin-equivalent shares, followed by hedge fund managers at approximately 7,694 bitcoin-equivalent shares. Brevan Howard was the single largest seller, reducing its BlackRock iShares Bitcoin Trust position by approximately 86 percent from about $2.4 billion to $275 million.

Why are hedge funds selling Bitcoin ETF positions?

Hedge funds are unwinding basis trading strategies as annualized returns have declined from double digits to approximately 4 percent due to overcrowding. Additionally, Bitcoin’s price decline of approximately 50 percent from October peaks has triggered systematic position reductions, with the post-October rally pullback appearing to cause systemic deleveraging.

How much have Bitcoin ETFs lost in outflows recently?

Spot Bitcoin ETFs have recorded five consecutive weeks of net outflows totaling approximately $4.3 billion as of February 2026, marking the longest outflow streak since November 2025. This contrasts with net buying of $4.3 billion in the same period of 2025, representing a $6.9 billion year-over-year decline in institutional flows.

Are any institutions still buying Bitcoin ETFs?

Yes. Government-related entities and holding companies increased positions during Q4. The Emirate of Abu Dhabi raised its IBIT position by 46 percent in Q4 2025. Investment advisors, despite being net sellers in Q4, have increased aggregate IBIT positions by 145 percent year-over-year, suggesting they may represent more durable long-term capital.

What is the current Bitcoin price and market sentiment?

Bitcoin is trading at approximately $64,000 as of February 2026, down from over $120,000 in October 2025. The Crypto Fear & Greed Index remains in “Extreme Fear” territory at 32, reflecting pervasive investor caution and risk aversion.