Asset managers reduced their stakes in spot bitcoin exchange-traded funds (ETFs) during the first quarter of 2025, following a 12% decline in the cryptocurrency’s price. Historically, asset managers have increased their holdings in spot bitcoin ETFs, but this trend reversed in the latest quarter.
Market Overview
- Spot bitcoin ETFs made their market debut in January 2024, presenting a more complex picture for investors.
- Hedge funds trimmed their holdings, while some financial advisory firms and wealth funds adjusted or rebalanced theirs.
- The collapse of the premium for bitcoin futures created a lucrative basis trade earlier, but circumstances have since changed for investors.
Key Changes in Holdings
Fidelity Investments
- Cut stake: Reduced by about £2 million ($3 million) from £5 million at year-end.
- Sold shares: ProShares Bitcoin Strategy ETF (BITO).
- Reduced position: By about £1 million ($1.5 million) from year-end levels in VanEck Bitcoin Trust (BTC).
- Trimmed stake: By about £1 million ($1.5 million) to less than half of its year-end position in Valkyrie XBTO Galaxy Bitcoin Fund Ltd.
BlackRock Inc.
- Slight cutback: Overall reduction worth around $10 million across BITO and BTC trusts combined compared to end-of-year levels.
- BlackRock has been expanding its exposure to cryptocurrencies through spot ETF investments over time, including adding new assets last quarter.
Vanguard Group
- Trimmed stakes: Worth around £6 million ($7 million) across BITO and BTC trusts combined compared to end-of-year levels.
Invesco Ltd.
- Continued investment: Despite recent price volatility, Invesco cut stakes worth around $20 million combined across BITO and BTC trusts in Q4 but plans to continue investing.
Conclusion
Overall, while most major players remain committed to the long-term potential of bitcoin ETFs, they are adjusting their positions in response to changing market conditions. The adjustments reflect a cautious approach amid recent price volatility, but the long-term outlook remains positive for many asset managers.
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