Bitcoin ETFs Experience First Quarterly Decline Amid Market Shifts

According to Cointelegraph, Bitcoin exchange-traded funds (ETFs) managed by institutional investors saw a contraction in early 2025, marking the first quarterly decrease since the introduction of U.S. spot ETFs. A CoinShares report highlights that institutional investors' exposure to Bitcoin (BTC) fell to $21.2 billion in the first quarter of 2025, down from $27.4 billion in the fourth quarter of 2024, indicating a 23% reduction over the period. The report, which draws on filings with the U.S. Securities and Exchange Commission (SEC), attributes much of this decline to an 11% drop in Bitcoin's price quarter-over-quarter, rather than a significant reduction in position sizes. Nonetheless, many investors have reduced their holdings, reflecting a combination of valuation impact and active selling. Professional money managers notably decreased their Bitcoin exposure during the first quarter of 2025. However, financial advisers emerged as an exception to this trend, slightly increasing their Bitcoin holdings. The analysis suggests that the last business quarter was characterized by corporate Bitcoin adoption for treasury and reserve purposes, rather than professional money managers purchasing ETFs. This shift indicates a move towards long-term savings strategies instead of short-term profit tactics. On May 30, BlackRock's iShares Bitcoin Trust (IBIT) recorded its largest day of outflows, with over $430 million exiting the investment vehicle after 31 consecutive days of inflows. Financial advisors slightly increased their Bitcoin holdings in the first quarter of 2025, diverging from the trend among money managers. Bitcoin treasury companies collectively held over 1.98 million BTC at the end of the quarter, marking an 18.6% year-to-date increase, as reported by CoinShares. Data from SaylorTracker reveals that Strategy, the leading Bitcoin treasury company, acquired 15,355 BTC on April 28 and has accumulated BTC in 17 out of the 20 weeks leading up to June 2025. Meanwhile, ETF flows during the first half of 2025 have been mixed, with macroeconomic news influencing investor sentiment. While many asset managers initially shifted from risk-on assets to traditionally safer options like U.S. government securities, rising bond yields suggest that confidence in these havens might be waning. Some analysts forecast that Bitcoin's long-term profit potential could be driven by a weaker market for U.S. bonds rather than ETF inflows.