Bitcoin institutional holdings drop 17% as hedge funds lead Q1 exodus

Institutional Bitcoin holdings suffered their steepest quarterly decline since spot ETFs launched, with hedge funds and brokerages accounting for 95% of the reduction.

Institutional Bitcoin holdings fell 17% to 261,000 BTC in the first quarter, the steepest decline since US spot ETFs launched, a CoinShares analysis of 13F filings shows.

"The selloff was concentrated among tactical investors," Matt Kimmell, analyst at CoinShares, said in a report published June 3.

Hedge funds cut their Bitcoin exposure by 39%, while brokerages reduced positions by 53%, together accounting for 95% of the total reduction. Morgan Stanley fully exited its 8,300 BTC position, and Jane Street reduced holdings by 10,800 BTC. The total dollar value of institutional Bitcoin exposure collapsed 35% to $17.8 billion as BTC fell roughly 22% during the quarter to about $68,000.

The divergence between tactical and structural holders suggests Bitcoin's institutional ownership base is becoming more concentrated among long-term allocators, potentially reducing sell-side pressure from ETF redemptions but also signaling that crypto remains a high-turnover asset for risk-managed portfolios.

Advisors Hold Steady as Banks Double Down

Financial advisors, the largest professional cohort holding 150,300 BTC or 58% of all 13F Bitcoin exposure, reduced positions by only 6% during the quarter. Banks more than doubled their aggregate holdings to 15,200 BTC, a 339% year-on-year increase. JPMorgan added approximately 3,000 BTC, Wells Fargo increased by roughly 4,000 BTC, and Citigroup disclosed its first-ever Bitcoin position at 97 BTC. Italy's Intesa Sanpaolo entered with 1,600 BTC. Sovereign-linked entities continued incremental accumulation, with Abu Dhabi's Mubadala Investment Fund adding 1,100 BTC, bringing the sovereign cohort to 8,300 BTC.

ETF Outflows Extend Pressure Into June

The institutional selloff coincided with a broader contraction in Bitcoin demand. US spot Bitcoin ETFs recorded a 13-day outflow streak through June 2, with nearly $4 billion exiting the products. BlackRock's iShares Bitcoin Trust accounted for about $3.3 billion of the redemptions, or roughly 75% of total withdrawals. Over the past 30 days, the ETFs have shed 51,726 BTC, or nearly $5 billion, according to WalletPilot data.

CryptoQuant head of research Julio Moreno said overall Bitcoin demand has dropped by about 501,000 BTC over the past month, marking the fastest monthly decline since May 2022. Despite the outflows, Standard Chartered's Geoffrey Kendrick noted that ETF holdings have remained broadly stable since February, suggesting more structural resilience than the flow data implies.

The key question for the coming weeks is whether the outflow streak reverses. A single day of net inflows would not confirm a trend change, but it would signal that redemption pressure is cooling. If outflows persist, Bitcoin's next support zone below $63,000 could come into focus.

This article is for informational purposes only and does not constitute investment advice.