Bitcoin exchange-traded funds (ETFs) proceed to hold billions in property regardless of bitcoin’s brutal price crash, but that endurance is not essentially the bullish sign that many have come to consider.
In keeping with one analyst, the resilience stems from market makers and arbitrageurs who commerce out and in quite than die-hard long-term holders betting on price appreciation.
Bitcoin’s price peaked above $126,000 in early October and just lately crashed to almost $60,000. Regardless of the price halving, the 11 spot bitcoin ETFs listed within the U.S. have cumulatively registered simply $8.5 billion in internet outflows. These funds nonetheless hold $85 billion in property beneath administration, which equates to over 6% of bitcoin’s provide.
A number of analysts, together with these CoinDesk spoke with at Consensus Hong Kong final week, cited the identical knowledge as proof of bullish positioning.
Markus Thielen, founding father of 10x Research, says the resilience comes not simply from long-term hodlers, but from market makers and arbitrageurs with hedged, non-directional positions.
“This displays the structural nature of ETF possession, which is dominated by market makers and arbitrage-focused hedge funds holding largely hedged positions, in addition to long-term institutional buyers with low turnover and longer funding horizons,” Thielen stated in a observe to purchasers on Wednesday.
Thielen pointed to studies from establishments (referred to as 13F filings) for late 2025. They present that 55% to 75% of BlackRock’s IBIT ETF, which holds $61 billion, is owned by market makers and arbitrage-focused hedge funds who preserve their bets hedged or impartial, not actually bullish on bitcoin.
Market makers are entities that create liquidity in an change’s order ebook, facilitating the seamless execution of huge purchase and promote orders at secure costs. They revenue from the bid-ask unfold and subsequently try to keep up market-neutral publicity to bypass price volatility dangers. Equally, arbitrage hedge funds take opposing positions in two markets, resembling spot ETFs and futures, to revenue from the price differential between the 2.
Each entities, subsequently, don’t inject directional pressures (bullish/bearish) into the market.
Thielen added that market makers trimmed publicity by round $1.6 billion to $2.4 billion in the course of the fourth quarter, as bitcoin traded close to $88,000, reflecting “declining speculative demand and diminished arbitrage stock necessities.”
