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Hedge funds trim bitcoin ETF positions

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State of Wisconsin exits bitcoin; Brown University buys in

By Suzanne McGee

May 15 (Reuters) -

A number of high-profile asset managers cut their stakes in

spot bitcoin exchange-traded funds amid a 12% drop in the

cryptocurrency's price in the first quarter of 2025, according

to recent regulatory filings.

This marks a shift from previous quarters when asset

managers had typically increased their holdings in spot bitcoin

ETFs, as shown in previous quarterly 13-F filings with the

Securities and Exchange Commission.

Spot bitcoin ETFs, which made their market debut in

January 2024, now paint a more complex picture. Hedge funds

trimmed their holdings while some financial advisory firms and

wealth funds boosted or rebalanced their positions.

"What we witnessed in the first quarter was the collapse of

the premium that people were paying for bitcoin futures, which

had set up a very lucrative basis trade," said Matt Hougan,

chief investment officer of Bitwise Asset Manager.

Hedge funds seeking to profit from the spread between spot

and futures prices could capture annualized yields in the region

of 15%, Hougan said.

"But that premium collapsed and reached its nadir around the

end of March," he said. "So I'm not surprised to see hedge funds

trim their holdings."

Millennium Management LLC cut its holdings of iShares

Bitcoin Trust ETF by 41% to 17.6 million shares and

exited its position in the Invesco Galaxy Bitcoin ETF.

It increased its stake in only two ETFs, boosting its holdings

of the ARK 21 Shares Bitcoin ETF and the Grayscale

Bitcoin Mini Trust.

Jersey-based Brevan Howard trimmed its stake in the iShares

ETF by 15.6%.

The State of Wisconsin Investment Board, one of the earliest

institutional investors to make a significant allocation to spot

bitcoin ETFs in the first quarter of 2024, sold its entire six

million share position in the iShares Bitcoin Trust in

the first three months of this year.

Meanwhile, Brown University made its first foray into

cryptocurrency ETF ownership during the same period, acquiring a

stake in the same ETF, worth $4.9 million at the end of March.

Neither the state pension fund nor representatives from

Brown University responded to requests for comment on their

moves.

Abu Dhabi's Mubadala sovereign wealth fund added to its

holdings of the iShares ETF in the first quarter, bringing its

total position to 8,726,972 shares, valued at $408.5 million.

"What will be most important for me is whether, when all the

data is finally in and we can analyze it, more investment

advisory firms are stepping in," said Hougan.

"That wave of adoption may be a slow-moving train, but it

has forward momentum."