Bitcoin Ownership Shifts as Hedge Funds Cut Exposure and Banks Increase Holdings

• Professional investors cut 52.5K BTC in Q1 as Bitcoin fell 22% and ETF exposure weakened.
• Banks added 7.8K BTC while Abu Dhabi’s Mubadala Fund increased sovereign Bitcoin holdings.
• Advisors held 150.3K BTC and remained the largest Bitcoin holder group despite modest selling.

Bitcoin ownership patterns changed during the first quarter of 2026 as hedge funds and brokerages reduced exposure during a market downturn, while banks, governments, and private equity firms increased their positions, according to data highlighted in a recent CoinShares report.

The quarter was marked by a decline in professional investor holdings as Bitcoin underwent a 22% correction, prompting several short-term market participants to scale back risk. At the same time, another group of investors continued adding exposure, leading to a shift in where Bitcoin was held across institutional categories.

Professional investors reduced their Bitcoin exposure by approximately 52,500 BTC during the quarter, bringing total holdings down from 313,000 BTC to 261,000 BTC. Their share of total U.S. spot Bitcoin ETF assets also declined from 24.7% to 20.8%, representing one of the largest quarterly reductions since the launch of spot Bitcoin ETFs.

Hedge funds accounted for the largest portion of the decline. Holdings within the sector fell by 31,400 BTC, reflecting a 39% quarter-over-quarter decrease and a 42% decline compared with the same period a year earlier. According to the report, negative perpetual futures funding rates and reduced profitability of basis trades contributed to position reductions.

Brokerages also cut exposure by 18,800 BTC during the quarter. Morgan Stanley exited an 8,300 BTC position, while Jane Street reduced holdings by 10,800 BTC. The report indicated that Morgan Stanley’s move likely coincided with the launch of its own Bitcoin ETF, while Jane Street’s reduction aligned with weaker ETF flows during the period.

While trading-focused participants reduced holdings, banks increased their Bitcoin exposure. Combined bank holdings rose by 7,800 BTC, more than doubling to 15,200 BTC.

JPMorgan Chase added 3,000 BTC, Wells Fargo increased holdings by 4,000 BTC, and Italy’s Intesa Sanpaolo entered the market with a 1,600 BTC position. Citigroup also appeared in filings for the first time with a 97 BTC holding.

Government-related holdings increased by 1,100 BTC, entirely attributed to the Abu Dhabi-based Mubadala Fund. This brought sovereign Bitcoin holdings to 8,300 BTC by the end of the quarter.

Private equity firms also expanded exposure. Holdings in the category increased 24% from the previous quarter and were up 124% year-over-year.

Investment advisors showed comparatively limited changes during the quarter. Advisor holdings declined by 9,400 BTC, or 5.9%, ending the quarter at 150,300 BTC.

Despite the reduction, advisors remained the largest holder category, representing roughly 58% of all Bitcoin reported through 13F filings. The report also noted that 159 new advisor filers entered the market during the quarter, while 321 fully exited their positions.

Outside of trading activity, several changes continued during the quarter, including progress involving SEC and CFTC classifications, a proposed Department of Labor 401(k) rule, and the expansion of bitcoin-backed credit products.

Related:David Schwartz Links Etymology Debate With Bitcoin Ownership Dispute