US professional investors sharply reduced their stakes in Bitcoin exchange-traded funds (ETFs) during the first quarter as the cryptocurrency endured a steep price correction. Data from CoinShares analyzing 13F filings, which disclose holdings of investment managers overseeing over $100 million in assets, showed a notable decline in total Bitcoin ETF exposure among these institutions.
The aggregate Bitcoin ETF holdings reported by these professionals dropped from 313,000 BTC to 261,000 BTC, marking a 17% contraction. In dollar terms, the value of these assets declined by 35%, falling to approximately $17.8 billion. Consequently, the share of total US Bitcoin ETF assets held by these large investors decreased to just over 20% from nearly a quarter of the market.
The reduction was predominantly driven by hedge funds and brokerages, which together accounted for roughly 96% of the selling pressure. Hedge funds slashed their Bitcoin ETF exposure by 39%, shedding 31,400 BTC, while brokerages cut theirs by over half, declining by 18,800 BTC. Conversely, investment advisors, the largest professional group holding 150,300 BTC, trimmed their positions by only 5.9%, showing a more measured approach during the downturn. Banks notably bucked the trend, more than doubling their Bitcoin ETF holdings by adding 7,800 BTC in the same period.
This selloff coincided with Bitcoin’s price falling sharply, with a nearly 22% drop in the first quarter alone. Bitcoin briefly dipped below the $60,000 mark, erasing roughly half of its peak value above $126,000 recorded in late 2025. Such market turbulence aligns with historical patterns where leveraged and tactical trading strategies unwind during downturns.
Despite the volatility, regulatory advancements painted a more supportive landscape for digital assets. Regulatory bodies in the US worked toward clearer definitions of oversight responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Proposals also emerged to integrate digital assets better into retirement account frameworks. These developments aim to provide greater stability and clarity for the industry’s future growth.
Further regulatory progress continued after the first quarter, with the SEC prioritizing digital asset regulation through 2030 in a recently published draft strategic plan. The agency plans to establish a coherent and principled framework for digital assets and blockchain technologies, signaling long-term support and structure for the market.
CoinShares also underscored the increasing acceptance of Bitcoin among traditional financial institutions, marking a shift toward mainstream integration despite recent price setbacks.