Institutional Investors Cut Their Stakes in Spot Bitcoin ETFs

In the first quarter of the year, when the Bitcoin price fell by 12%, many high-profile asset managers cut their stakes in spot Bitcoin ETFs. Recent regulatory filings have revealed that asset managers reduced their holdings in spot Bitcoin ETFs, a marked shift from previous quarters where they typically increased their stakes. 

Spot Bitcoin ETFs debuted in January 2024, the first among spot crypto ETFs. Since then, they have been a favorite among financial advisory firms and wealth funds. However, earlier this year, many of them rebalanced their positions. In the first quarter, we witnessed the collapse of the premium people were paying for Bitcoin futures. 

Hedge funds could capture annual yields around 15% by profiting from the spread between futures prices. However, Millennium Management LLC cut its holding of spot Bitcoin ETFs by 41%, and Brevan Howard trimmed its stake by 15.6%. The State of Wisconsin Investment Board sold its entire 6 million position in the iShares Bitcoin Trust. 

Outlook for Spot Bitcoin ETF

Spot Bitcoin ETF inflows have supported the Bitcoin price above $100K last week. Spot ETF inflows cushioned a downside in the Bitcoin price because of the GENIUS Act, and last week, spot BTC ETF net inflows were $608.4 million. BlackRock’s iShares Bitcoin Trust (IBIT) dominated with inflows of $841.7 million. The US spot Bitcoin ETF market extended its inflow streak to 5 weeks. 

Spor BTC ETF flows remain significant to near-term price trends, and strong ETF inflows may ensure the Bitcoin price prediction today of $110,000 is met. Higher ETF outflows could drag the Bitcoin price toward $90,000. 

Abu Dhabi’s sovereign wealth fund, Mubadala, had recently made a $408 million investment in BlackRock’s Bitcoin ETF. This has boosted Bitcoin ETF holdings amid record US inflows. Mubadala now owns 8,726,972 shares of IBIT. 

As spot Bitcoin ETFs continue to rake in serious inflows, BlackRock’s Bitcoin ETF stands out as the foremost choice for institutional investors. 

Conclusion

Looking ahead, spot Bitcoin ETFs are poised to expand beyond the current US offerings with multi-coin and international products expected to secure approvals over the next 12 to 18 months. Regulatory clarity around these vehicles will likely encourage deeper institutional participation and drive net inflows even higher. By mid-May 2025, US spot Bitcoin ETFs had amassed over 40 billion dollars in net inflows, surpassing US gold ETFs by a factor of 4.22 in their first 17 months. 

Meanwhile, BlackRock plans to launch a Bitcoin exchange-traded product in Europe later this year under the EU’s MiCA framework, further broadening market access. Technological enhancements, such as in-kind creation redemptions, are expected to improve tracking efficiency and reduce fees over time. 

The pipeline of crypto ETFs tracking assets like Ethereum, Cardano, and Solana signals a wave of diversification pending SEC approvals. Institutional research indicates that the advent of spot Bitcoin ETFs will catalyze widespread adoption among pension fund endowments and corporate treasuries. 

Given sustained weekly inflows and ongoing product innovation, the future outlook for spot Bitcoin ETFs is highly positive, with significant long-term growth anticipated in both ETF assets and underlying Bitcoin demand. 

About the Author: Sarah Zimmerman is a seasoned crypto and Web3 news writer passionate about uncovering the latest developments in the digital asset space. With years of hands-on experience covering blockchain innovations, cryptocurrency trends, and decentralized technologies, she strives to deliver insightful and balanced news that empowers her readers. Her work is dedicated to demystifying complex topics and keeping you informed about the ever-evolving world of technology.