BlockBeats news, on February 23, according to Bloomberg, hedge funds that previously drove the surge in U.S. Bitcoin ETFs are rapidly withdrawing. According to data compiled by CF Benchmarks, a wholly owned subsidiary of the crypto exchange Kraken, the total allocation of Bitcoin ETFs held by the largest hedge funds declined by 28% between the third and fourth quarters of 2025.
Gabe Selby, Head of Research at CF Benchmarks, wrote in a research report on February 19: "The dominant theme over the past two quarters has been hedge fund de-risking. The October spike and subsequent decline appears to have triggered systematic unwinding."
Brevan Howard significantly adjusted its position in BlackRock’s iShares Bitcoin Trust, becoming the largest seller of the spot ETF in the fourth quarter. Its holdings declined by approximately 86% to 5.5 million shares, reducing the value of its spot position from around $2.4 billion to $275 million. As bitcoin prices fell alongside macroeconomic risks—and at times declined even more sharply—the earlier rationale promoted to institutional investors, that bitcoin could hedge against inflation, currency depreciation, or stock market stress, was undermined.