Bitcoin exchange-traded funds (ETFs) have experienced their first quarterly decline since the introduction of U.S. spot ETFs, signaling a significant shift in institutional investment strategies.
According to a recent CoinShares report, institutional investors' exposure to Bitcoin (BTC) dropped to $21.2 billion in Q1 2025 from $27.4 billion in Q4 2024, representing a 23% decrease over the period .
This downturn coincides with Bitcoin's price falling approximately 11.8% during the same quarter, marking its worst first-quarter performance since 2018 .
Notably, several major asset managers adjusted their positions in Bitcoin ETFs amid this volatility. Millennium Management reduced its stake in the iShares Bitcoin Trust ETF by 41% and exited the Invesco Galaxy Bitcoin ETF, while Brevan Howard trimmed its iShares stake .
Despite these reductions, some institutions increased their holdings. Brown University disclosed a new $4.9 million investment in the iShares Bitcoin Trust ETF, and Abu Dhabi’s Mubadala sovereign wealth fund increased its holdings to nearly $409 million .
Analysts suggest that while hedge funds are taking a more cautious approach, the continued interest from advisory firms indicates a potential for sustained, incremental adoption of spot Bitcoin ETFs .
As the market adjusts to these shifts, the performance of Bitcoin ETFs in the coming quarters will be closely watched by investors and analysts alike.
