TL;DR:
- Form 13F filers liquidated a total of 52,500 BTC from exchange-traded funds during the first quarter of 2026.
- Hedge funds and brokerage firms accounted for 95% of the reduction in professional exposure within the regulated funds market.
- Financial advisors maintained the largest share with 150,300 BTC accumulated, which equates to 58% of recorded institutional positions.
Digital asset manager CoinShares published a report identifying the institutional players that liquidated their positions in Bitcoin ETFs during the market correction in the first quarter of 2026. The data, compiled through Form 13F filings with the U.S. Securities and Exchange Commission (SEC), shows opposing behavior between traditional hedge funds and banking investment vehicles.
The CoinShares report, signed by analyst Matt Kimmell, reveals that total professional holdings dropped from 313,000 BTC to 261,000 BTC during the analyzed period. This variation represents a 17% contraction in volume compared to the previous quarter, which equates to a 35% reduction in market value, bringing institutional capital to $17.8 billion. The report indicates that the proportion of these funds’ assets held by firms subject to Form 13F fell from 24.7% to 20.8% in the same cycle.
Hedge Funds Concentrated the Sale of Crypto Assets
Liquidation activity was specifically concentrated among market participants focused on short-term tactical strategies. The data presented suggests that hedge funds reduced their portfolios by 31,400 BTC, a net 39% drop in their quarterly holdings. Meanwhile, brokerage firms sold 18,800 BTC, recording a 53% decline in their overall positions. Both sectors accounted for nearly the entirety of the professional outflow observed in U.S. funds.
Negative funding rates in perpetual futures contracts and the unwinding of arbitrage trades may have influenced the exit of these institutional funds, according to the current analysis trend from CoinShares. Capital allocation toward artificial intelligence projects and precious metals presents itself as another variable for liquidity competition during this period. The price of the benchmark digital asset ended the first quarter of 2026 at around $68,000 after experiencing a 22% quarterly decline.
Conversely, traditional banking channels increased their direct participation in listed financial vehicles. Consolidated banking exposure rose to 15,200 BTC, a figure that doubles the previous quarter’s records and shows a 339% year-over-year increase. Reports from JPMorgan Chase reflected the addition of 3,000 BTC, while Wells Fargo added 4,000 BTC to their regulated custody. Entities such as Citigroup also appeared for the first time within these official crypto-asset balance sheets.
The Abu Dhabi sovereign wealth fund, Mubadala, also increased its holdings by adding 1,100 BTC to its balances, raising state participation in these instruments to an estimated 8,300 BTC. Financial advisors retained control of the largest institutional share with 150,300 BTC under management, after applying a minor downward adjustment of just 5.9% over the first three months of the year.
The development of capital flows varied after the close of the quarter under analysis, as U.S. exchange-traded funds captured $2.3 billion in net capital inflows through mid-May 2026. Institutional investors now await the publication of the next second-quarter regulatory position reports, scheduled to be filed with the SEC in August 2026.
