Recent regulatory filings from major US institutional investors have revealed a notable decline in their exposure to Bitcoin exchange-traded funds (ETFs) for the first time since these funds began trading in January 2024. According to the latest 13F filings, which are submitted quarterly to the Securities and Exchange Commission (SEC) by institutional investment managers with portfolios exceeding US$100 million (approximately AU$153.9 million), there has been a 23% quarter-on-quarter reduction in Bitcoin ETF holdings. The total assets in Bitcoin ETFs plummeted from US$27.4 billion (AUD$42.1 billion) in the previous quarter to US$21.2 billion (AUD$32.6 billion) at the close of Q1 2025.
The decline has been largely attributed to an 11% drop in Bitcoin’s price during Q1 and strategic profit-taking by hedge funds following significant gains that occurred after the US elections and the initial ETF launches. However, CoinShares, a European digital asset investment firm, views this downturn as a temporary market adjustment rather than a permanent retreat from institutional investment in Bitcoin ETFs.
Notably, while hedge funds slashed their holdings by about one-third, investment advisors such as BlackRock and Goldman Sachs have increased their Bitcoin positions, holding a consistent quantity when measured in Bitcoin rather than US dollars. This points to a behavioural divergence where hedge funds capitalised on price rises—which soared from around US$60,000 to US$100,000—while advisors appear to be rebalancing client portfolios towards greater Bitcoin exposure.
CoinShares describes this shift in holdings as a “healthy market adjustment” within a broader positive trajectory for Bitcoin adoption. They express optimism that the current movements reflect strategic repositioning rather than diminished institutional interest, paving the way for greater future allocations.
In addition to these ETF developments, CoinShares reports an ongoing trend of corporate Bitcoin accumulation. Corporate holdings of Bitcoin have increased from 1.68 million to 1.98 million since early 2025, indicating a robust 19% growth in just five months. Despite this impressive accumulation, it’s worth noting that the average institutional allocation to Bitcoin remains below 1%.
Currently, the Bitcoin ETF landscape is predominantly driven by retail and smaller investment firms, with these categories accounting for an overwhelming US$71.1 billion (AUD$109.4 billion) of total assets under management, compared to the US$21.1 billion (AUD$32.6 billion) managed by 13F-reporting firms.
Looking ahead, CoinShares anticipates that institutional engagement with Bitcoin ETFs will increase alongside a more established regulatory environment and expanding knowledge among financial professionals. They predict that as regulatory frameworks solidify and levels of understanding improve, institutional investors will gradually enhance their exposure to digital assets.
In summary, while recent data indicates a temporary pullback in institutional investment in Bitcoin ETFs, the overall sentiment remains positive, with significant potential for future growth from both corporate and institutional investors. The evolution in regulation and investor education is expected to further facilitate this trend in the years to come.
