Spot bitcoin ETFs in the U.S. continue to oversee roughly $85 billion in assets despite bitcoin’s sharp correction — but that durability may not signal the kind of bullish conviction many investors assume.
After surging above $126,000 in early October, bitcoin (BTC) has since fallen to nearly $60,000, effectively cutting its price in half. Even so, the 11 U.S.-listed spot bitcoin ETFs have recorded cumulative net outflows of just $8.5 billion. Collectively, the funds still manage about $85 billion, representing more than 6% of the circulating bitcoin supply.
Some market participants, including analysts who spoke at Consensus Hong Kong last week, view the relatively modest outflows as evidence of strong underlying demand. However, others argue the picture is more nuanced.
Markus Thielen, founder of 10x Research, said the resilience reflects the structural makeup of ETF ownership rather than widespread long-term bullish positioning.
In a note to clients, Thielen said a significant portion of ETF shares are held by market makers and arbitrage-focused hedge funds that typically maintain hedged, non-directional exposure. “This reflects the structural nature of ETF ownership, which is dominated by market makers and arbitrage-focused hedge funds holding largely hedged positions, as well as long-term institutional investors with low turnover and longer investment horizons,” he wrote.
Thielen cited late-2025 13F filings showing that between 55% and 75% of BlackRock’s iShares Bitcoin Trust — which holds about $61 billion — is owned by market makers and arbitrage-driven hedge funds. These players typically hedge their positions, meaning they are not necessarily expressing outright bullish views on bitcoin’s price.
Market makers provide liquidity by continuously quoting buy and sell prices, earning profits from the bid-ask spread while aiming to remain market-neutral. Arbitrage hedge funds, meanwhile, seek to capture price discrepancies between related instruments — such as spot ETFs and futures — by holding offsetting positions in both markets. As a result, neither group tends to add significant directional pressure to bitcoin’s price.
Thielen added that market makers reduced their exposure by an estimated $1.6 billion to $2.4 billion during the fourth quarter, when bitcoin was trading near $88,000, a move he said reflected waning speculative demand and lower arbitrage inventory needs.
In other words, while ETF assets have remained sizable through the downturn, much of that stability may be driven by structural trading strategies rather than steadfast, long-term bullish conviction.
