Hedge Funds Led Bitcoin ETF Exodus in 2026 Slump as Sovereign Funds Bought, Galaxy Research Finds

A handful of hedge funds and banks drove nearly all institutional selling in U.S. spot Bitcoin ETFs during the 2026 slump, while wealth platforms and sovereign funds bought the dip, according to a Galaxy Research report published Monday. Institutions filing quarterly 13F reports held 355,000 BTC worth of spot ETF shares at the end of September 2025, before Bitcoin's all-time high. By June 2026, holdings had fallen 14% to 307,000 BTC. Nine firms — including Millennium Management, Brevan Howard, Goldman Sachs, Capula Management, Farallon Capital, D.E. Shaw, Schonfeld Strategic Advisors, Symmetry Investments and Tudor Investment — cut 68,000 BTC worth of exposure, roughly $5.4 billion at current prices, trimming positions by 29% to 100%. The other roughly 2,200 filers added about 20,000 BTC in aggregate, worth roughly $1.6 billion. Buyers included Morgan Stanley's wealth management arm, Abu Dhabi's Mubadala and the Abu Dhabi Investment Council. Galaxy research head Alex Thorn attributed the selling to the cash-and-carry trade, not a Bitcoin bet, as the front-month basis compressed to 4.8% annualized in the 30 days to Oct. 21 from 7.9% before the high.