Nine firms sold 68,000 BTC worth of Bitcoin ETF shares, more than the whole market's net drop. That one number tells the real story of the last year in Bitcoin funds: a small group of traders walked out, while a much bigger crowd quietly bought what they sold.
Key points:
- Just nine hedge funds and banks cut 68,000 BTC from their ETF holdings, worth about $5.4 billion at today's prices.
- Everyone else, added together, actually added around 20,000 BTC, with wealth firms and sovereign funds among the buyers.
- The sellers were mostly running a cash-and-carry trade, Galaxy says, and that trade stopped paying once the futures gap shrank to almost nothing.
Galaxy Research published the report on Monday, after digging through SEC 13F filings. Between September 2025 and June 2026, firms that file those reports went from holding 355,000 BTC worth of spot ETF shares to 307,000 BTC, a drop of 14%. The nine firms behind nearly all of it were Millennium Management, Brevan Howard, Goldman Sachs, Capula Management, Farallon Capital, D.E. Shaw, Schonfeld Strategic Advisors, Symmetry Investments and Tudor Investment. Each one cut between 29% and 100% of its position.
My own read is simple: these were renters, not owners. The firms that sold were renting Bitcoin exposure to earn a spread. When the spread dried up, they handed the keys back and left. That is a very different story from long-term holders losing faith.
Read also: Bitcoin ETFs Add $176M as October Outflows Shrink to $26M
Why did the big sellers walk away?
The trade worked like this. A firm bought ETF shares and sold Bitcoin futures against them, pocketing the gap between the two prices. Before Bitcoin's high, that gap ran at 7.9% a year, a full 3.9 points above three-month Treasury bills. In the 30 days to October 21, it averaged just 4.8%, only 0.6 points above bills. After fees and rolling costs, Galaxy puts what was left at about 1.5 points over cash. Galaxy's research chief, Alex Thorn, put it plainly: the math, not the price, is why those desks left.
On the other side, Morgan Stanley's wealth arm, Abu Dhabi's Mubadala and the Abu Dhabi Investment Council were among the buyers. Advisers, family offices and people who do not file 13Fs cut their holdings by just 6.6% while Bitcoin's price fell 49%. Taken together, ETF holdings fell just 11% from their October 2025 peak to their July low while Bitcoin fell 53%. Since the June low, the funds have added 87,000 BTC, which Galaxy reads as straight buying rather than carry trades. Flows lately have been choppy: the ETFs shed nearly $1 billion over two weeks earlier in October, then saw a strong day on October 19, a three-day $1 billion inflow run, and heavy outflows after that. This week, they have taken in roughly $286 million so far. One catch: the 13F data runs through June, so it misses the newest shifts.
Traders should watch three things next: the next 13F round, the futures gap, and the weekly flows. If the gap stays thin, there is less forced selling left to come. If wealth firms and sovereign funds keep adding, the holder mix keeps moving from traders to people who plan to stay.
Read also: Galaxy Digital Swings to $323M Profit, Unveils $200M Buyback — What's Next?
— BitByLine News Desk
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Sources: Decrypt, CoinMarketCap