SKN | Bitcoin ETFs Still Hold $85B After Price Crash — but Analysts Say Structure Tells a Different Story

Key Points

• U.S. spot Bitcoin ETFs continue to hold roughly $85 billion in assets despite BTC falling from $126,000 to near $60,000.

• Net outflows total just $8.5 billion, representing a modest reduction relative to total assets.

• Analysts argue ETF resilience is largely driven by market makers and arbitrage funds, not purely long-term bullish investors.

U.S.-listed spot Bitcoin ETFs have retained the bulk of their assets despite one of the sharpest drawdowns of the current cycle — but the apparent stability may not signal strong directional conviction.

Bitcoin has fallen from a peak above $126,000 in early October to nearly $60,000 at its recent lows. Even so, the 11 U.S. spot Bitcoin ETFs still hold approximately $85 billion in assets under management, representing more than 6% of Bitcoin’s circulating supply. Cumulative net outflows during the downturn amount to just $8.5 billion.

To some observers, that resilience reflects institutional confidence. However, Markus Thielen argues the composition of ETF ownership paints a more nuanced picture.

Structural Ownership Dominates

According to Thielen, founder of 10x Research, the durability of ETF assets is less about long-term bullish positioning and more about structural ownership patterns dominated by market makers and arbitrage-focused hedge funds.

“This reflects the structural nature of ETF ownership,” Thielen wrote in a client note, citing a mix of market-neutral participants and institutional investors with low turnover.

Recent 13F filings from late 2025 suggest that between 55% and 75% of holdings in BlackRock’s IBIT — the largest spot Bitcoin ETF with approximately $61 billion in assets — are owned by market makers and arbitrage funds.

These entities typically maintain hedged positions rather than outright directional bets on Bitcoin’s price.

How Market Makers Shape the Data

Market makers provide liquidity by continuously quoting bid and ask prices, profiting from spreads rather than price appreciation. To reduce exposure to volatility, they often hedge ETF positions with futures or other derivatives.

Similarly, arbitrage funds may hold spot ETFs while shorting Bitcoin futures, capturing price differentials without taking a net bullish stance.

As a result, large ETF holdings do not automatically equate to strong bullish conviction. These participants can scale exposure up or down based on volatility, spreads and inventory requirements rather than long-term views on Bitcoin’s trajectory.

Thielen noted that market makers trimmed ETF exposure by roughly $1.6 billion to $2.4 billion during the fourth quarter when Bitcoin was trading near $88,000, signaling reduced speculative demand and lower arbitrage opportunities.

Stability Versus Sentiment

The limited net outflows during Bitcoin’s nearly 50% correction contrast with previous crypto downturns, where retail-driven vehicles often saw rapid capital flight.

However, ETF stability may partly reflect the mechanics of institutional trading rather than unwavering confidence. Long-term institutional investors with low turnover represent part of the ownership base, but a substantial share is structurally hedged.

This dynamic helps explain why ETF assets have not collapsed despite price volatility — but also why ETF flows may not provide a clean read on directional sentiment.

Strategic Implications

The persistence of $85 billion in ETF assets underscores Bitcoin’s integration into mainstream financial infrastructure. Spot ETFs now represent a structural component of market liquidity.

Yet interpreting ETF AUM as inherently bullish can be misleading. If ownership remains concentrated among market-neutral players, ETF stability may reflect hedging strategies rather than accumulation.

For Bitcoin’s next sustained leg higher, analysts suggest broader directional inflows — particularly from unhedged institutional allocators — would likely be required.

For now, ETF resilience signals structural maturity. Whether it signals renewed upside conviction remains an open question.