Institutional investment managers increased their allocations to U.S. spot Bitcoin exchange-traded funds (ETFs) in the fourth quarter of 2025, even as the asset suffered a sharp price correction that shaved off nearly a quarter of its market value.
The discrepancy between stock growth and asset value declines illustrates the complexities of institutional investor behavior during periods of extreme volatility.
According to crypto slate According to the data, the price of Bitcoin performed well in the last three months of last year, reaching an all-time high of over $126,000 in October.
However, that rise proved unsustainable and gave way to a tumultuous period sparked by a massive $20 billion deleveraging event. By the end of the year, Bitcoin was trading below $90,000.
Despite this turbulent backdrop, early regulatory filings suggest professional money managers are viewing the pullback as a buying opportunity rather than a reason to exit the market.
At the time of writing, BTC has regained its upward momentum this year and is aiming to surpass $100,000.
Cumulative calculation
An initial analysis of 13F filings compiled by Bitcoin analyst Sani reveals that 121 institutions reported a net increase of 892,610 shares across various U.S.-listed spot Bitcoin ETFs from Q3 to Q4 2025.
Paradoxically, even though the number of physical shares held by these companies increased, the total value of those holdings decreased by approximately $19.2 million.
To understand this movement, we need to look at the raw totals reported by these companies. In the third quarter of 2025, the tracked institutions held a total of 5,252,364 shares, valued at approximately $317.8 million.
By the end of the fourth quarter, their holdings had ballooned to 6,144,974 shares, but the market value of the big pile had fallen to $298.6 million.
This calculation reveals the extent of the drawdown. Based on these filings, the implied average value per ETF share held by these institutions decreased from approximately $60.50 in the third quarter to approximately $48.60 in the fourth quarter. This is a decrease of approximately 19.7%.
Despite this repricing, the total number of shares held by these managers increased by approximately 17%.
The story that emerges from the data is clear. These investors continued to buy units even as the market value of their holdings evaporated, adding direct exposure to the teeth of the drawdown.
For context, Dartmouth College’s $9 billion endowment revealed that it acquired approximately $15 million in stakes in BlackRock’s IBIT and Grayscale’s Ethereum funds despite broader market conditions.
Notably, these positions are new and indicate that crypto ETFs continue to attract institutional investor interest regardless of their performance.
black rock phenomenon
Nowhere is the disconnect between capital flows and asset performance more evident than in the books of BlackRock iShares Bitcoin Trust (IBIT).
The fund achieved something incredibly rare in the wealth management business last year, attracting billions of dollars in new inflows at a cost to clients.
IBIT ended 2025 as the sixth most popular ETF in the U.S. by net inflows, according to data from Bloomberg Intelligence. It raised $25.4 billion in new cash, beating incumbent giants like Invesco QQQ Trust and SPDR Gold Trust (GLD).
This inflow occurred even as IBIT posted a 10% loss. In contrast, gold rose nearly 65% in 2025, supported by central bank purchases and geopolitical instability.
Industry insiders noted that the fund’s performance shows asset managers’ confidence in Bitcoin.
Bitwise Chief Investment Officer Matt Hogan noted that 99% of advisors who held cryptocurrencies in 2025 plan to increase or maintain their exposure this year.
People are wondering what advisors will do if cryptocurrencies reach some level of volatility. We found our answer. They plan to buy more.
Adoption or arbitrage?
However, there is an interesting caveat to the “institutional adoption” story.
Spot Bitcoin ETFs exist at the intersection of long-term investing and short-term arbitrage. Stock appreciation in 13F filings gives the appearance of bullish conviction, but it often masks market-neutral hedges.
On the surface, the adoption story is unfounded. A December State Street study estimated the U.S. Bitcoin ETF market at $103 billion, with institutional investors owning nearly a quarter of the float. Their data suggests that 60% of institutional investors prefer the regulatory safety of ETF wrappers over holding physical coins.
But the “long ETF” positions reported in the 13F filing don’t tell the whole story.
These forms require administrators to disclose long positions in U.S. stocks, but do not require disclosure of short positions. Remarkably, this effectively hides the other side of the trade.
As CME points out, hedge funds frequently use spot ETFs to perform basis trading. They are buying ETFs (which are listed on their tax returns) and at the same time shorting Bitcoin futures (which are not listed on their tax returns).
This allows you to capture the spread between spot and futures prices without taking any directional risk on Bitcoin itself.
This distinction is important for predicting the market’s next move. If Q4’s accumulation was driven by genuine allocators building “portfolio sleeves” then the capital would likely be sticky.
But if it’s driven by a spread-based hedge fund, that capital becomes mercenary. If volatility spikes or the profitability of basis trading declines, it could quickly reverse.
Whatever the motivation, the result is the same. In a quarter in which Bitcoin lost nearly a quarter of its value, Wall Street ended up holding even more of it.
(Tag translation) Bitcoin
