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Institutional investment managers increased their allocations to US spot Bitcoin exchange-traded funds (ETFs) during the fourth quarter of 2025, despite the asset suffering a sharp price correction that shaved nearly a quarter off its market value.
The divergence between rising share counts and falling asset values presents a complex picture of institutional behavior during a period of extreme volatility.
According to CryptoSlate’s data, Bitcoin’s price began the last three months of last year on a strong footing, reaching a new all-time high of more than $126,000 in October.
However, that rally proved unsustainable and gave way to a tumultuous period sparked by a massive $20 billion deleveraging event. By the time the year concluded, Bitcoin was trading under $90,000.
Despite this turbulent backdrop, early regulatory filings suggest that professional money managers viewed the pullback as a buying opportunity rather than a reason to exit the market.
As of press time, BTC has since returned to an upward momentum this year and is eyeing a break above $100,000.
The accumulation math
An early analysis of 13F filings compiled by Bitcoin analyst Sani revealed 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.
Paradoxically, while the physical number of shares held by these firms increased, the aggregate dollar value of those holdings fell by approximately $19.2 million.
To understand this dynamic, one must look at the raw totals reported by these firms. In the third quarter of 2025, the tracked institutions held a collective 5,252,364 shares valued at roughly $317.8 million.
By the end of the fourth quarter, their holdings had swelled to 6,144,974 shares, yet the market value of that larger pile had shrunk to $298.6 million.
This math reveals the extent of the drawdown. Based on these filings, the implied average value per ETF share held by these institutions dropped from approximately $60.50 in Q3 to roughly $48.60 in Q4. That marks a decline of roughly 19.7%.
Despite this repricing, the total share count held by these managers rose by about 17%.
The narrative emerging from the data is clear. These investors continued to buy units even as the mark-to-market value of their holdings evaporated, adding exposure directly into the teeth of a drawdown.
For context, Dartmouth College’s $9 billion endowment fund revealed it had acquired around $15 million in shares of BlackRock’s IBIT and Grayscale’s Ethereum fund, despite the broader market situation.
Notably, these positions are new and show how the crypto ETFs continue to attract institutional interest regardless of their performance.
The BlackRock phenomenon
Nowhere is this disconnect between capital flows and asset performance more visible than in the books of the BlackRock iShares Bitcoin Trust (IBIT).
Last year, the fund achieved something incredibly rare in the asset management business as it attracted billions of dollars in fresh inflows while losing money for its clients.
IBIT ended 2025 as the sixth-most popular ETF in the United States by net inflows, according to Bloomberg Intelligence data. It raised $25.4 billion in fresh cash, beating established giants like the Invesco QQQ Trust and the SPDR Gold Trust (GLD).
This influx occurred despite IBIT posting a 10% loss. By contrast, gold rallied nearly 65% in 2025, buoyed by central bank purchases and geopolitical anxiety.
Industry stakeholders noted that the fund’s performance demonstrated the asset managers’ conviction in Bitcoin.
Matt Hougan, the Chief Investment Officer at Bitwise, pointed out that 99% of advisors who owned crypto in 2025 plan to increase or maintain their exposure this year.
People have wondered what advisors would do if crypto hit a patch of volatility. We have our answer: They’re planning to buy more.
Adoption or arbitrage?
However, there is an interesting caveat to the “institutional adoption” narrative.
Spot Bitcoin ETFs exist at the crossroads of long-term investment and short-term arbitrage. A rising share count in a 13F filing looks like bullish conviction, but it can often mask a market-neutral hedge.
On the surface, the adoption story holds water. State Street research from December estimates the US Bitcoin ETF market at $103 billion, with institutions owning nearly a quarter of that float. Their data suggests that 60% of institutional investors prefer the regulatory safety of an ETF wrapper over holding physical coins.
However, the “long ETF” positions reported in 13F filings do not tell the whole story.
These forms require managers to disclose long positions in US equities but do not require disclosure of short positions. Notably, this effectively hides the other side of the trade.
As the CME has noted, hedge funds frequently use spot ETFs to execute basis trades. They buy the ETF (which shows up in the filing) and simultaneously short Bitcoin futures (which does not).
This allows them to capture the spread between the spot and futures price without taking any directional risk on Bitcoin itself.
This distinction is critical for forecasting the market’s next move. If the fourth quarter’s accumulation was driven by genuine allocators building “portfolio sleeves,” that capital is likely sticky.
However, if it was driven by hedge fund capitalizing on spreads, that capital is mercenary. It could reverse quickly if volatility spikes or if the basis trade becomes less profitable.
Regardless of the motive, the result is the same. In a quarter where Bitcoin lost nearly a quarter of its value, Wall Street ended up owning more of it.
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