Hedge funds and brokerages drove Q1 bitcoin ETF selling

Coinshares reported that institutional 13F filers sold roughly 52,500 BTC in the first quarter of 2026. Hedge funds accounted for about 31,400 BTC of the sales and brokerages for about 18,800 BTC. Advisors trimmed holdings by 5.9%, while bank positions increased to roughly 15,200 BTC.

The Coinshares analysis, authored by digital asset analyst Matt Kimmell, showed professional bitcoin holdings fell from 313,000 BTC to 261,000 BTC, a 17% quarter-over-quarter decline. The reported value of those holdings dropped 35% to $17.8 billion. Kimmell described the period as the largest quarterly reduction in professional ownership since U.S. spot bitcoin ETFs began trading. The share of ETF assets held by 13F filers slipped from 24.7% to 20.8% over the quarter.

Selling was concentrated among traders. Hedge funds reduced positions by 31,400 BTC, a 39% decline, and brokerages cut exposure by 18,800 BTC, a 53% decline. Coinshares pointed to negative perpetual futures funding rates and the unwinding of basis trades as likely contributors to hedge fund exits. The report also noted competing capital demands, including large investments in artificial intelligence and interest in precious metals, as possible factors in allocation changes.

Advisors remained the largest professional group, holding about 150,300 BTC, or roughly 58% of reported professional holdings, and trimmed positions modestly during the quarter. Coinshares reported advisor holdings were about 20% higher year over year.

Banks increased bitcoin exposure to about 15,200 BTC, more than doubling from the prior quarter and rising 339% from a year earlier. JPMorgan added about 3,000 BTC, Wells Fargo about 4,000 BTC, and Citigroup appeared in filings for the first time. Sovereign and government-related entities also raised allocations; Abu Dhabi’s Mubadala Fund added about 1,100 BTC, bringing sovereign holdings to roughly 8,300 BTC.

The selling coincided with a drop in bitcoin’s price. The asset fell about 22% during Q1, ending the quarter near $68,000 after a brief dip below $60,000. That represented about a 50% correction from the October 2025 all-time high above $126,000. Coinshares noted on-chain metrics recorded the largest realized losses since July 2023 and that sentiment indicators reached historic lows during the quarter.

Conditions improved after Q1. Coinshares reported U.S. spot bitcoin ETFs attracted roughly $2.3 billion in net inflows through mid-May, and combined ETF and digital asset treasury flows approached $6.4 billion. Michael Saylor wrote on X after his firm disclosed a small sale that capital markets were directing roughly $400 billion into AI over six months and that bitcoin ETFs saw about $4 billion of outflows since May 14, calling the pattern “a capital rotation, not a bitcoin impairment.”

Investors and analysts will monitor second-quarter 13F filings due in August to track whether professional selling stabilized or whether buying resumed as market conditions changed. 13F filings are quarterly disclosures that institutional investment managers file with regulators and are used to track changes in professional allocations to ETFs and other holdings.