Hedge funds, brokers drove 52,000 BTC sell-off in Q1

CoinShares analyzed quarterly 13F filings, the regulatory disclosures that list equity holdings of U.S. investment managers with at least $100 million in assets. It found professional investors reduced their U.S. spot Bitcoin ETF exposure by about 52,000 BTC in the first quarter, a 17% decline from 313,000 BTC to 261,000 BTC. The dollar value of those holdings fell 35% to $17.8 billion, and the share of total U.S. Bitcoin ETF assets held by 13F filers declined to 20.8% from 24.7%.

The selling was concentrated among hedge funds and brokerages, which accounted for roughly 96% of the reduction. Hedge funds cut about 31,400 BTC, a 39% decline from the prior quarter, while brokerages reduced holdings by about 18,800 BTC, a 53% drop. Investment advisors, the largest professional group with roughly 150,300 BTC on record, trimmed exposure by 5.9%. Banks increased their allocations, adding approximately 7,800 BTC during the quarter.

The professional selling coincided with a notable correction in Bitcoin’s price. Bitcoin fell about 22% during Q1, extending losses that began in late 2025 and briefly trading below $60,000. At its lowest point in the period, the cryptocurrency was roughly 50% below an October 2025 high above $126,000.

CoinShares highlighted regulatory developments that could affect the sector. U.S. regulators are working to clarify the division of oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission, and regulators have proposed changes to how digital assets could be treated in retirement accounts. The SEC released a draft Strategic Plan through 2030 outlining a regulatory framework for digital assets and distributed ledger technologies.

Legislative work continues as well. The CLARITY Act, a market-structure bill that would define roles for the SEC and CFTC and set broader rules for digital assets, remains under debate; some lawmakers expect it could reach the Senate floor as early as August, though the bill has faced scrutiny from the banking industry.

CoinShares also noted growing acceptance of Bitcoin among traditional financial institutions. Large asset managers have acknowledged Bitcoin’s potential role in diversified portfolios amid changes in stock-and-bond performance since 2020.

Matt Kimmell, a CoinShares digital asset analyst, wrote: “This dataset is consistent with what bitcoin markets have historically looked like in drawdowns. Leveraged and tactical strategies unwind.”