Why Wall Street refuses to sell Bitcoin – and actually bought way more – even while losing 25% of its value
Institutional funding managers elevated their allocations to US spot Bitcoin exchange-traded funds (ETFs) in the course of the fourth quarter of 2025, regardless of the asset struggling a pointy worth correction that shaved almost 1 / 4 off its market value.
The divergence between rising share counts and falling asset values presents a fancy image of institutional habits throughout a interval of excessive volatility.
According to CryptoSlate’s information, Bitcoin’s worth started the final three months of final yr on a robust 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 interval sparked by a massive $20 billion deleveraging event. By the time the yr concluded, Bitcoin was buying and selling underneath $90,000.
Despite this turbulent backdrop, early regulatory filings counsel that skilled cash managers seen the pullback as a shopping for alternative slightly than a motive to exit the market.
As of press time, BTC has since returned to an upward momentum this yr and is eyeing a break above $100,000.
The accumulation math
An early evaluation of 13F filings compiled by Bitcoin analyst Sani revealed that 121 establishments reported a web improve of 892,610 shares throughout numerous US-listed spot Bitcoin ETFs from the third quarter to the fourth quarter of 2025.
Paradoxically, while the bodily quantity of shares held by these corporations elevated, the combination greenback value of these holdings fell by roughly $19.2 million.
To perceive this dynamic, one should have a look at the uncooked totals reported by these corporations. In the third quarter of 2025, the tracked establishments held a collective 5,252,364 shares valued at roughly $317.8 million.
By the top of the fourth quarter, their holdings had swelled to 6,144,974 shares, but 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 common value per ETF share held by these establishments dropped from roughly $60.50 in Q3 to roughly $48.60 in This autumn. That marks a decline of roughly 19.7%.
Despite this repricing, the overall share depend held by these managers rose by about 17%.
The narrative rising from the information is evident. These buyers continued to purchase items even because the mark-to-market value of their holdings evaporated, including publicity instantly into the tooth of a drawdown.
For context, Dartmouth College’s $9 billion endowment fund revealed it had acquired round $15 million in shares of BlackRock’s IBIT and Grayscale’s Ethereum fund, regardless of the broader market state of affairs.
Notably, these positions are new and present how the crypto ETFs proceed to entice institutional curiosity regardless of their efficiency.
The BlackRock phenomenon
Nowhere is that this disconnect between capital flows and asset efficiency more seen than within the books of the BlackRock iShares Bitcoin Trust (IBIT).
Last yr, the fund achieved one thing extremely uncommon within the asset administration enterprise because it attracted billions of dollars in fresh inflows while losing cash for its purchasers.
IBIT ended 2025 because the sixth-most in style ETF within the United States by web inflows, in accordance to Bloomberg Intelligence information. It raised $25.4 billion in recent money, beating established giants just like the Invesco QQQ Trust and the SPDR Gold Trust (GLD).
This inflow occurred regardless of IBIT posting a ten% loss. By distinction, gold rallied nearly 65% in 2025, buoyed by central financial institution purchases and geopolitical anxiousness.
Industry stakeholders famous that the fund’s efficiency demonstrated the asset managers’ conviction in Bitcoin.
Matt Hougan, the Chief Investment Officer at Bitwise, identified that 99% of advisors who owned crypto in 2025 plan to improve or keep their publicity this yr.
People have questioned what advisors would do if crypto hit a patch of volatility. We have our reply: They’re planning to purchase more.
Adoption or arbitrage?
However, there’s an attention-grabbing caveat to the “institutional adoption” narrative.
Spot Bitcoin ETFs exist on the crossroads of long-term funding and short-term arbitrage. A rising share depend in a 13F submitting seems like bullish conviction, however it will probably usually masks a market-neutral hedge.
On the floor, the adoption story holds water. State Street research from December estimates the US Bitcoin ETF market at $103 billion, with establishments proudly owning almost 1 / 4 of that float. Their information means that 60% of institutional buyers want the regulatory security of an ETF wrapper over holding bodily cash.
However, the “lengthy ETF” positions reported in 13F filings don’t inform the entire story.
These varieties require managers to disclose lengthy positions in US equities however don’t require disclosure of quick positions. Notably, this successfully hides the opposite facet of the commerce.
As the CME has noted, hedge funds regularly use spot ETFs to execute basis trades. They purchase the ETF (which reveals up within the submitting) and concurrently quick Bitcoin futures (which doesn’t).
This permits them to seize the unfold between the spot and futures worth with out taking any directional danger on Bitcoin itself.
This distinction is crucial for forecasting the market’s subsequent transfer. If the fourth quarter’s accumulation was pushed by real allocators constructing “portfolio sleeves,” that capital is probably going sticky.
However, if it was pushed by hedge fund capitalizing on spreads, that capital is mercenary. It may reverse shortly if volatility spikes or if the premise commerce turns into much less worthwhile.
Regardless of the motive, the outcome is identical. In 1 / 4 the place Bitcoin misplaced almost 1 / 4 of its value, Wall Street ended up proudly owning more of it.
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