Why is Wall Street refusing to sell Bitcoin? 121 institutions increase holdings against the trend ETF

Bitcoin plummeted by 25% from $126,000 in Q4 2025, but 121 institutions net increased their holdings by 892,610 shares of ETF, a 17% increase. BlackRock IBIT lost 10% but still attracted $25.4 billion in inflows, with Dartmouth College’s endowment purchasing 15 million. Data from Bitwise shows 99% of advisors plan to increase holdings, but CME points out that some may be engaging in basis arbitrage rather than genuine allocation.

Contradiction: 121 Institutions Increasing 890,000 Shares Against the Trend

(Source: Sani)

Despite a sharp correction in Bitcoin’s price and a nearly quarter reduction in market cap, institutional fund managers still increased their allocations to US spot Bitcoin ETFs in Q4 2025. The divergence between rising share counts and declining asset value illustrates the complex behavior of institutions during extreme volatility. According to CryptoSlate data, Bitcoin had a strong start in the last three months of the previous year, hitting a record high of over $126,000 in October.

However, this rally was short-lived, followed by turbulence triggered by a massive deleveraging event totaling $20 billion. By year-end, Bitcoin’s trading price fell below $90,000. Despite market turmoil, early regulatory filings showed that professional fund managers viewed this pullback as a buying opportunity rather than a reason to exit the market. As of press time, Bitcoin has regained upward momentum in 2025 and is poised to break the $100,000 mark.

Early analysis of 13F filings by Bitcoin analyst Sani indicates that 121 institutions reported a net increase of 892,610 shares of various US-listed spot Bitcoin ETFs from Q3 to Q4 2025. Paradoxically, while the number of shares held increased, their total value decreased by approximately $19.2 million.

To understand this dynamic, one must look at the raw totals disclosed by these firms. In Q3 2025, the tracked institutions held a total of 5,252,364 shares valued at about $317.8 million. By the end of Q4, their holdings rose to 6,144,974 shares, but the market value of these shares shrank to $299.6 million. This calculation reveals the extent of the pullback, with the implied average price per ETF declining from about $60.50 in Q3 to approximately $48.60 in Q4—a drop of roughly 19.7%.

Despite the re-pricing, the total number of shares held by these managers increased by about 17%. The conclusion from the data is clear: these investors continued to buy even as the market value of their holdings shrank significantly, increasing their investments during a major downturn. This behavior explains why Wall Street refuses to sell Bitcoin and instead chooses to add to their positions during price dips.

BlackRock IBIT Loses 10% but Attracts $25.4 Billion in Inflows: An Anomaly

This disconnect between capital flows and asset performance is most evident in BlackRock’s iShares Bitcoin Trust (IBIT). Last year, the fund achieved a rare feat in the asset management industry: attracting billions of dollars in new capital while incurring losses for clients.

According to Bloomberg Industry Research, IBIT became the sixth-largest net inflow ETF in the US by the end of 2025. It raised $25.4 billion, surpassing established giants like Invesco QQQ Trust and SPDR Gold Trust (GLD). Despite a 10% decline, IBIT still experienced this wave of capital inflows. In contrast, gold prices rose nearly 65% in 2025, boosted by central bank gold purchases and geopolitical tensions.

This “losses attracting capital” phenomenon is extremely rare in traditional asset management. Usually, poor performance triggers redemptions, with investors shifting funds to better-performing funds. Yet, IBIT experienced the opposite. This counterintuitive situation suggests that investors are not making decisions based on short-term performance but are instead following long-term strategic allocations. Institutional investors believe Bitcoin’s long-term value proposition remains intact, and short-term price volatility offers better entry points.

As context, Dartmouth College’s $9 billion endowment revealed that, despite the overall poor market conditions, it purchased about $15 million worth of BlackRock IBIT and Grayscale Ethereum Trust shares. Notably, these positions are newly established, indicating that regardless of how crypto ETFs perform, they continue to attract institutional interest. University endowments are typically among the most conservative and professional investors, making their allocations based on rigorous due diligence and long-term perspectives. This new allocation strongly endorses Bitcoin’s long-term value.

Basis Arbitrage or Genuine Allocation? Market Secrets Unveiled

However, there is an interesting exception to the “institutional adoption” narrative. Spot Bitcoin ETFs sit between long-term investment and short-term arbitrage. The increasing holdings reported in 13F filings seem bullish but often conceal market-neutral hedging strategies. These filings require fund managers to disclose their US equity long positions but do not require revealing short positions, which effectively masks the other side of the trade.

As the Chicago Mercantile Exchange (CME) points out, hedge funds often use spot ETFs to execute basis trades. They buy the ETF (disclosed in filings) while shorting Bitcoin futures (not disclosed). This allows them to profit from the price difference between spot and futures without taking any directional risk on Bitcoin itself.

This distinction is crucial for predicting the market’s next move. If the Q4 capital accumulation is driven by genuine asset allocators constructing “portfolio arbitrage,” then these funds are likely to be less transferable. However, if the activity is driven by hedge funds exploiting price differentials for profit, then these flows are purely opportunistic. Once market volatility increases or basis trading profits diminish, this behavior could quickly reverse.

Bitwise Chief Investment Officer Matt Hougan states that 99% of crypto-advisors plan to increase or maintain their 2025 investments. “There has been speculation about how advisors will react if the crypto market experiences volatility. Now we have the answer: they plan to increase holdings.” Regardless of the motivation, the result is the same: during this quarter, when Bitcoin’s value has shrunk by nearly a quarter, Wall Street’s Bitcoin holdings have actually increased.