Wall Street’s Bitcoin ETF Flip-Flop: Big Players Dump 40% of Holdings Amid Q1 Price Slump
When the going gets tough, the ’smart money’ gets going—straight for the exits. Major asset managers slashed their spot Bitcoin ETF exposure by nearly half after Q1’s price plunge, proving once again that institutional ’conviction’ lasts exactly as long as the bull run does.
Funny how those ’long-term hodl’ strategies vanish when portfolios start bleeding. Maybe next time they’ll wait more than 90 days before declaring crypto winter?
Institutional investors shift their Bitcoin ETF holdings
Not only hedge funds — public pension funds, too, re-evaluated their stakes. State of Wisconsin Investment Board (SWIB), among the first institutional investors to buy spot Bitcoin ETFs, sold the whole of its 6 million shares position in IBIT in Q1 2025. That followed a huge bet on Bitcoin in early 2024.
In contrast, Brown University quietly entered the crypto investment space with a surprising move, purchasing approximately $4.9 million worth of shares in BlackRock’s iShares Bitcoin Trust (IBIT), according to a filing dated March 31. The Ivy League institution joins a growing number of educational endowments exploring digital assets as part of broader portfolio diversification and risk mitigation strategies.
Meanwhile, sovereign wealth funds are a fickle source. Mubadala Investment Company in Abu Dhabi increased its Bitcoin holdings. It now holds over 8.7 million IBIT shares, worth $408.5 million. This indicates that a few long-term institutions still see Bitcoin as an asset class, even through short-term fluctuation.
Financial advisors signal continued interest
As hedge funds retreat, other classes of investors are slowly moving in. Some financial advisers and wealth managers held or added a bit to their spot Bitcoin ETF exposure in Q1.
Hightower Advisors, for one, announced combined holdings of roughly $68 million in various Bitcoin funds. The firm has also hinted for years at the desire to provide clients with a way to invest in digital assets through regulated products such as an ETF.
Matt Hougan of Bitwise thinks this could be a gradual but transformational move.
He said that what he WOULD be looking for most is whether, once all the data is available, more financial advisory firms begin to enter the market. He added that the wave of adoption is a slow-moving train, but it is steadily gaining momentum.
That shift in direction indicates that while the first wave of whirlwind excitement around spot Bitcoin ETFs wanes, that second wave (from advisors and retail) is still just getting started.
This stance feels justified in the light of recent data. In early May, BlackRock’s IBIT is said to have seen the highest single-day outflows ever reported. The fund lost over $36 million in a single trading session.
That was one of the largest daily outflows since the ETF’s inception and came as global regulatory attention and interest in crypto coins continued to wane.
Nevertheless, the total AUM in all US-listed spot Bitcoin ETFs remains at over $40 billion—indicating that institutional interest, although cooling, is not disappearing.
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