Nine Funds Drove Bitcoin ETF Selling, Galaxy Research Finds

By Elena Vasquez

Nine investment firms cut a combined 68,000 BTC, roughly $5.4 billion at current prices, from U.S. spot Bitcoin ETF exposure by June 2026, according to a Galaxy Research report published Monday.

Who accounted for the institutional selling?

Institutions filing quarterly 13F reports with the U.S. Securities and Exchange Commission held 355,000 BTC in spot Bitcoin ETFs at the end of September 2025, just before Bitcoin reached its all-time high. By June 2026, holdings had fallen to 307,000 BTC, a 14% reduction.

Galaxy identified nine sellers:

• Millennium Management
• Brevan Howard
• Goldman Sachs
• Capula Management
• Farallon Capital
• D.E. Shaw
• Schonfeld Strategic Advisors
• Symmetry Investments
• Tudor Investment

Those firms trimmed their positions by between 29% and 100%. Their combined 68,000 BTC reduction exceeded the 48,000 BTC net decline across all 13F filers, meaning roughly 2,200 other filers added about 20,000 BTC in aggregate, worth roughly $1.6 billion at current prices.

Among the buyers were Morgan Stanley’s wealth management arm, Mubadala and the Abu Dhabi Investment Council. Advisers, family offices and individuals that do not file 13Fs reduced holdings by just 6.6% while Bitcoin fell 49%.

The headline reduction therefore came from a concentrated group of large sellers, not a uniform retreat across every category of investor.

Why did the sellers reduce exposure?

Galaxy head of firmwide research Alex Thorn said the sellers were largely running a trade, not making a bet on Bitcoin. Many used the cash-and-carry strategy: buying spot ETF shares while shorting CME Bitcoin futures to capture the gap between the two, known as the basis.

The front-month basis averaged 7.9% annualized during the 30 days before Bitcoin’s high, 3.9 percentage points above three-month Treasury bills. In the 30 days to October 21, it averaged 4.8%, only 0.6 points above bills. After fees, rolling costs and margin, Galaxy estimated that the trade now earned about 1.5 points over cash.

“That arithmetic, not the price, is why the multi-strategy desks left,” Thorn wrote. Galaxy frames the reduction as a strategy-driven exit, although that explanation does not establish that no seller also reassessed Bitcoin. In plain terms, sellers had much less income available to absorb the trade’s risks.

What do futures positions show?

U.S. Commodity Futures Trading Commission data on CME Bitcoin futures shows a parallel reduction. Asset managers’ net long position fell from 43,300 BTC in the week of Bitcoin’s all-time high to 18,400 BTC, a 57% drop. Leveraged funds’ net short position, the futures side of the carry trade, fell by the same proportion, from 71,400 BTC to 30,600 BTC.

Open interest fell 28% in Bitcoin terms and 51% in dollar terms. November and December futures priced in 6.3% to 6.5% at the October 21 close, roughly two points above bills before costs. Thorn argued that the slim edge did not compensate for tail risk: in December 2022, the basis inverted to negative 31% annualized.

The futures data supports a carry-trade unwind. It does not, however, establish each seller’s motive.

Did buying return after June?

Overall, spot Bitcoin ETF holdings fell 11% from their October 2025 peak to their July trough while Bitcoin fell 53%. Since the June low, the funds added 87,000 BTC, which Galaxy calls “directional buying” rather than carry.

Recent flows have been uneven. Decrypt reported that the ETFs shed nearly $1 billion over two weeks earlier this month, then recorded their best day in nearly a month on October 19, when BlackRock’s IBIT accounted for all buying.

Since then, a three-day, $1 billion inflow run has been followed by heavy outflows. Spot Bitcoin ETF flows turned positive again this week, but at a smaller scale, with roughly $286 million in inflows so far.

The 13F data runs only through June and does not capture those more recent shifts. Galaxy also disclosed that it holds Bitcoin, a relevant fact when assessing the research.

Recent trading shows active two-way flows, but the filing lag prevents a firm conclusion about current institutional ownership. Reduced basis income does not, by itself, prove durable investor rejection. The next quarterly 13F filings and CME positioning should reveal whether large sellers returned or stayed away.