Bitcoin ETF Q1 Outflows: Hedge Funds Cut 39% as Banks Add
CoinShares’ Q1 13F-based review shows a sharp shift in Bitcoin ETF ownership as the bear market deepened. Professional investors cut total Bitcoin ETF exposure to 261,000 BTC (from 313,000 BTC), a 17% decline, while the reported value fell 35% to $17.8B. The share of US Bitcoin ETF assets held by 13F filers dropped to 20.8% from 24.7%.
Selling was concentrated in hedge funds and brokerages, driving about 96% of the reduction in Bitcoin ETF holdings. Hedge funds trimmed 31,400 BTC (-39%) and brokerages reduced 18,800 BTC (-53%). Investment advisors were comparatively stable, down just 5.9% to 150,300 BTC. Banks more than offset the magnitude of individual selling by adding about 7,800 BTC during the quarter.
The institutional positioning change aligns with price weakness: BTC fell 22% in Q1 and briefly dipped below $60,000. CoinShares said the pattern resembles prior drawdowns where leveraged and tactical strategies unwind. Citigroup also flagged that spot Bitcoin ETF flows influence roughly 45% of weekly BTC return fluctuations, meaning further ETF outflows could pressure near-term moves.
On the longer-term outlook, CoinShares pointed to regulatory progress and potential catalysts, including clearer SEC/CFTC oversight and proposed retirement-account rules for digital assets, plus continued market focus on the CLARITY Act.
Bearish
Q1 data shows sustained Bitcoin ETF de-risking by the most price-sensitive groups (hedge funds and brokerages), with clear balance-sheet impact (BTC exposure -17%, value -35%). Since spot Bitcoin ETF flows are closely linked to weekly BTC returns (~45% per Citigroup), further outflows can mechanically pressure BTC in the near term. While banks added BTC and long-term regulatory clarity could help sentiment, the dominant near-term signal is ongoing institutional selling, which typically weighs on trend and volatility.