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Institutional investment managers augmented their investments in US spot Bitcoin exchange-traded funds (ETFs) during the last quarter of 2025, even as the asset experienced a significant price drop that reduced its market value by nearly 25%.
The contrast between the growing share counts and declining asset values paints a complicated picture of institutional activity amidst a time of intense volatility.
Data from CryptoSlate indicates that Bitcoin’s price started the final quarter of last year robustly, hitting a new all-time high exceeding $126,000 in October.
However, this surge was not sustainable and led to a tumultuous phase triggered by a massive $20 billion deleveraging event. By the end of the year, Bitcoin was trading below $90,000.
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In spite of this chaotic backdrop, preliminary regulatory filings indicate that professional asset managers perceived the downturn as a buying opportunity rather than a reason to exit the market.
As of the latest update, BTC has regained upward momentum this year and is approaching a breakthrough above $100,000.
The accumulation math
An initial analysis of 13F filings compiled by Bitcoin analyst Sani showed that 121 institutions reported a net increase of 892,610 shares across various US-listed spot Bitcoin ETFs from the third quarter to the fourth quarter of 2025.
Institutional Investors 13F Filings Showing Their Bitcoin Exposure (Source: Sani)
Interestingly, while the number of shares held by these firms increased, the overall dollar value of those holdings fell by around $19.2 million.
To comprehend this dynamic, one must examine the raw totals reported by these firms. In the third quarter of 2025, the tracked institutions held a combined 5,252,364 shares valued at approximately $317.8 million.
By the end of the fourth quarter, their holdings had grown to 6,144,974 shares, yet the market value of this larger quantity had declined to $298.6 million.
This calculation reveals the severity of the drawdown. Based on these filings, the implied average value per ETF share held by these institutions fell from roughly $60.50 in Q3 to about $48.60 in Q4, indicating a decline of approximately 19.7%.
Despite this repricing, the total share count held by these managers increased by approximately 17%.
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The story emerging from the data is unmistakable. These investors continued to acquire units even as the mark-to-market value of their holdings diminished, increasing exposure directly during a drawdown.
For context, Dartmouth College’s $9 billion endowment fund disclosed it had purchased roughly $15 million in shares of BlackRock's IBIT and Grayscale's Ethereum fund, irrespective of the broader market circumstances.
Significantly, these positions are new and demonstrate how crypto ETFs continue to draw institutional interest, regardless of their performance.
The BlackRock phenomenon
This disconnect between capital flows and asset performance is most evident in the records of the BlackRock iShares Bitcoin Trust (IBIT).
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Last year, the fund achieved something quite rare in the asset management industry as it attracted billions of dollars in new inflows while losing money for its clients.
IBIT concluded 2025 as the sixth-most popular ETF in the United States by net inflows, according to Bloomberg Intelligence data. It garnered $25.4 billion in fresh cash, surpassing established giants like the Invesco QQQ Trust and the SPDR Gold Trust (GLD).
This influx occurred despite IBIT reporting a 10% loss. In contrast, gold surged nearly 65% in 2025, driven by central bank acquisitions and geopolitical tensions.
Industry participants noted that the fund's performance illustrated the asset managers’ belief in Bitcoin.
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Matt Hougan, the Chief Investment Officer at Bitwise, highlighted that 99% of advisors who owned crypto in 2025 intend to increase or maintain their exposure this year.
People have speculated about what advisors would do if crypto faced a period of volatility. We have our answer: They're planning to purchase more.
Matthew Hougan Chief Investment Officer • Bitwise Share on View Profile
Adoption or arbitrage?
Nevertheless, there exists an intriguing caveat to the “institutional adoption” narrative.
Spot Bitcoin ETFs occupy a position at the intersection of long-term investment and short-term arbitrage. An increase in share count in a 13F filing appears as bullish conviction, but it can sometimes conceal a market-neutral hedge.
At first glance, the adoption narrative seems plausible. State Street research from December estimates the US Bitcoin ETF market at $103 billion, with institutions holding nearly a quarter of that float. Their data suggests that 60% of institutional investors prefer the regulatory security of an ETF wrapper over holding physical coins.
However, the “long ETF” positions reported in 13F filings do not provide the complete picture.
These forms require managers to disclose long positions in US equities but do not mandate the disclosure of short positions. This notably obscures the other side of the trade.
As noted by the CME, hedge funds often use spot ETFs to execute basis trades. They purchase the ETF (which appears in the filing) and simultaneously short Bitcoin futures (which does not).
This strategy allows them to capture the spread between the spot and futures prices without taking any directional risk on Bitcoin itself.
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This distinction is vital for predicting the market’s next direction. If the accumulation in the fourth quarter was driven by genuine allocators constructing “portfolio sleeves,” that capital is likely to be sticky.
Conversely, if it was driven by hedge funds taking advantage of spreads, that capital is opportunistic. It could quickly reverse if volatility surges or if the basis trade becomes less lucrative.
Regardless of the underlying motive, the consequence remains the same. In a quarter where Bitcoin lost nearly a quarter of its value, Wall Street ended up owning a larger share of it.
The post Why Wall Street refuses to sell Bitcoin – and actually bought way more – even while losing 25% of its value appeared first on CryptoSlate.
