It's interesting to note that US-based Bitcoin ETFs continue holding nearly $85 billion in assets, even after the brutal price drop. BTC went from over $126,000 in early October and plummeted to around $60,000 afterward, but the exchange-traded funds didn't suffer massive outflows as many expected.

The 11 spot ETFs listed there had only $8.5 billion in net outflows. At first glance, this seems like genuine optimism, right? Well, according to Markus Thielen from 10x Research, not quite.

The resilience of these funds hides a very different reality. Thielen points out that most of the ownership isn't from long-term investors passionate about Bitcoin, but rather from market makers and hedge funds focused on crypto arbitrage. These guys aren't betting on price appreciation; they're operating with hedged, neutral positions from a directional standpoint.

To clarify: market makers create liquidity in order books and profit from the spread between buy and sell prices. Crypto arbitrage funds take opposite positions in two different markets, like spot ETFs and futures, to profit from the price difference between them. Neither of these exerts real upward or downward pressure on the market.

Looking at 13F filings data from late 2025, Thielen shows that between 55% and 75% of BlackRock's IBIT, which manages $61 billion, is controlled by these market makers and arbitrage funds. In other words, most aren't truly bullish on Bitcoin—they're just operating.

It's also revealing that during Q4, when Bitcoin traded near $88,000, market makers reduced their exposure by about $1.6 to $2.4 billion. Thielen interprets this as a sign of declining speculative demand and reduced inventory requirements for arbitrage.

Bitcoin's price is now around $74,240, but it has been struggling to sustain a real breakout above $76,000 for nearly two months. Meanwhile, funding rates for perpetual contracts remain negative, suggesting the market is still quite cautious.

In summary: that $85 billion in ETFs that seemed like a positive signal might be much less bullish than it appears. Most of it is involved in crypto arbitrage, not genuine currency betting. It's worth keeping an eye on this.