Wall Street hedge funds reduce Bitcoin ETF exposure

Nine major hedge funds and banks, including Goldman Sachs, Millennium Management, and Tudor Investment, significantly reduced their spot Bitcoin ETF holdings between late 2025 and mid-2026. According to Galaxy Research, these firms collectively cut exposure by approximately 68,000 BTC, valued at roughly $5.4 billion.

The selling was driven by technical arbitrage strategies rather than a loss of confidence in the asset. As the basis between spot ETFs and CME Bitcoin futures shrank relative to Treasury bills, the profitability of the cash-and-carry trade diminished.

While these institutional sellers exited, wealth management platforms and sovereign wealth funds acted as buyers. Notable purchasers included Morgan Stanley’s wealth management arm, Mubadala, and the Abu Dhabi Investment Council. Despite the institutional retreat, US spot Bitcoin ETFs have since recovered 87,000 BTC in holdings from their June 2026 lows.