Nine hedge funds and banks cut 68,000 BTC of spot Bitcoin ETF exposure, according to Galaxy Research. Galaxy says they left because a futures trade stopped paying well, not because they soured on Bitcoin, while wealth platforms and sovereign funds kept buying.
A handful of hedge funds and banks drove almost all of the institutional selling in U.S. spot Bitcoin ETFs, according to a Galaxy Research report published Monday. Wealth platforms and sovereign funds stepped in to buy.
Nine firms, including Millennium Management, Goldman Sachs and Tudor Investment, cut 68,000 BTC of exposure, roughly $5.4 billion at today's prices.
Nine firms account for the institutional decline
Institutions that file quarterly 13F reports with the SEC held 355,000 BTC of spot ETF shares at the end of September 2025, just before Bitcoin's all-time high. By June 2026, that had fallen to 307,000 BTC, a 14% drop.
The other roughly 2,200 filers added about 20,000 BTC, worth roughly $1.6 billion. Morgan Stanley's wealth management arm, Mubadala and the Abu Dhabi Investment Council were among the buyers.
Advisers, family offices and individuals who don't file 13Fs cut their holdings by just 6.6% while the price fell 49%.
A futures trade stopped paying
Galaxy head of firmwide research Alex Thorn says the sellers were largely running a trade, not betting on Bitcoin. Many used the cash-and-carry strategy, buying spot ETF shares while shorting CME Bitcoin futures to pocket the gap between the two, known as the basis.
That gap has nearly vanished. The front-month basis averaged 4.8% in the 30 days to Oct. 21, just 0.6 points above three-month Treasury bills, versus 7.9% annualized in the 30 days before Bitcoin's high. The report estimates the trade now earns about 1.5 points over cash after fees, rolling costs and margin.
According to Thorn: "That arithmetic, not the price, is why the multi-strategy desks left"
CFTC data points the same way. Asset managers' net long position fell 57%, from 43,300 BTC to 18,400 BTC, and CME Bitcoin futures open interest is down 28% in Bitcoin terms and 51% in dollar terms.
ETF holdings recover since June
Spot ETF holdings fell just 11% from their October 2025 peak to their July trough while Bitcoin fell 53%. Since the June low, the funds have added 87,000 BTC. Galaxy calls this directional buying rather than carry.
The next test comes with Q3 13F filings, due by November 16, 2026. The 13F data runs through June, so it doesn't capture more recent shifts.
Sources: Decrypt, Crypto Briefing
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