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Hedge funds and banks sold about 68,000 Bitcoin worth of ETF shares in the nine months between the period just before Bitcoin’s October 2025 high and the end of June, roughly $5.4 billion at current prices, Decrypt reported. Millennium, Brevan Howard, Goldman Sachs, D.E. Shaw and five other firms led the selling, with some trimming positions by a third and others exiting entirely.
The same filings show who bought on the other side. Morgan Stanley’s wealth management arm, Mubadala and the Abu Dhabi Investment Council were among the buyers, and roughly 2,200 other filers added about 20,000 Bitcoin between them.
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Key facts
- Nine hedge funds and banks sold about 68,000 Bitcoin worth of ETF shares over nine months, roughly $5.4 billion at today’s prices, per Decrypt’s review of SEC filings.
- The ETF-versus-futures spread paid 7.9% annualized before the high and 4.8% by late October; Galaxy’s Alex Thorn estimated about 1.5 points over cash after fees and financing.
- Morgan Stanley’s wealth management arm, Mubadala and the Abu Dhabi Investment Council were among buyers, while about 2,200 other filers added roughly 20,000 Bitcoin.
- Bitcoin ETFs drew $137 million in net inflows on Wednesday, flipping October positive for the month.
- Since June, the funds have bought back 87,000 Bitcoin as directional purchases rather than arbitrage.
The arbitrage, not the price, drove the selling
The exit was mechanical. The trade involved buying the ETF while betting against Bitcoin in the futures market, capturing the gap between the two prices regardless of which way the coin moved. It only made sense as long as that gap beat what the same cash would earn in Treasury bills.
That condition broke down as the spread compressed. Thorn’s point, as Decrypt relayed it, was that the arithmetic rather than the price is why multi-strategy desks left. Futures data echoes the shift: Decrypt reported that both legs of the trade shrank by nearly identical amounts, around 57% each, which is what a closed arbitrage position looks like rather than a directional bearish bet.
Smaller investors behaved differently. Advisers, family offices and individuals too small to file cut holdings by just 6.6% while the price fell 49%, Decrypt reported.
Why it matters
The holder base behind US spot Bitcoin ETFs has changed character. The funds that arrived to harvest a spread have largely gone, and the balance has shifted toward sovereign investors, bank wealth platforms and smaller long-term holders. That matters for how ETF flows behave in drawdowns: arbitrage capital leaves quickly when spreads narrow, while the remaining holders have so far shown little appetite to sell. It also reframes how October’s recovery should be read, as fewer leveraged positions rather than a return of the fast money.
What to watch
October’s flow figure is the immediate test. The month was down $907 million at the midpoint and sat essentially flat through Tuesday, with $724 million arriving in the last eight sessions and $400 million-plus this week. Whether those inflows carry into November, alongside the next quarterly filings, will show how durable the new ownership mix is.
This article reports market data and does not constitute financial advice. Crypto prices and ETF flows are volatile and can reverse quickly.
Reported by Decrypt.
Source: Decrypt