Hedge funds dump $5.4 bn of Bitcoin ETFs as cash‑and‑carry trade dries up
Nine Wall Street hedge funds and banks, including Millennium Management, Goldman Sachs and Brevan Howard, cut their spot Bitcoin ETF exposure by about 68,000 BTC between September 2025 and June 2026, a sell‑off worth roughly $5.4 bn. Galaxy Research attributes the unwind to the collapse of the cash‑and‑carry arbitrage trade that bought ETFs and shorted CME Bitcoin futures, not to a change in Bitcoin’s price outlook. The remaining 2,200 reporting institutions added about 20,000 BTC, while overall 13F holdings fell 14% to 307,000 BTC.
Why it matters
The exit of fast‑money desks removes a source of artificial demand for Bitcoin ETFs, meaning future flow numbers will reflect more genuine investor sentiment, according to Galaxy Research. The shift also reduces net long positions in CME Bitcoin futures by 57%, which could affect futures market liquidity.
Key facts
- 1Nine firms sold 68,000 BTC of spot Bitcoin ETF exposure, valued at about $5.4 bn at current prices. finance.biggo.com
- 2Overall institutional 13F holdings fell from 355,000 BTC at the end of September 2025 to 307,000 BTC in June 2026, a 14% decline. forexcrunch.com
- 3The remaining roughly 2,200 reporting institutions were net buyers, adding about 20,000 BTC (≈$1.6 bn). finance.biggo.com
- 4The front‑month futures basis averaged 7.9% annualised in the 30 days before Bitcoin’s peak, then 4.8% in the 30 days through 21 Oct, only 0.6 points above three‑month Treasury bills. finance.biggo.com
- 5Asset managers’ net long CME Bitcoin futures fell 57% to 18,400 BTC, while leveraged funds’ net short fell 57% to 30,600 BTC. forexcrunch.com
- 6ETF inflows rebounded to roughly $286 million in the week beginning 26 Oct after a prior $1 bn outflow over two weeks. forexcrunch.com
Summary written by AlphAI AI Desk from 5 of 5 sources. Not investment advice. Figures are as stated by the linked sources.