Bitcoin exchange-traded funds (ETFs) continue to hold billions in assets despite bitcoin’s brutal price crash, but that persistence isn’t necessarily the bullish signal many have come to believe.
According to one analyst, the resistance comes from market makers and arbitrageurs trading in and out rather than hard-line long-term holders betting on price growth.
Bitcoins the price peaked above $126,000 in early October and recently crashed to nearly $60,000. Despite the price halving, the 11 spot bitcoin ETFs listed in the US have collectively recorded only $8.5 billion in net outflows. These funds still have $85 billion in assets under management, which equates to over 6% of bitcoin’s supply.
Several analysts, including those CoinDesk spoke to at Consensus Hong Kong last week, cited the same data as evidence of bullish positioning.
Markus Thielen, founder of 10x Research, says the resilience comes not only from long-term hodlers, but from market makers and arbitrageurs with hedged, non-directional positions.
“This reflects the structural nature of ETF ownership, which is dominated by market makers and arbitrage-focused hedge funds that hold largely hedged positions, as well as long-term institutional investors with low turnover and longer investment horizons,” Thielen said in a note to clients on Wednesday.
Thielen pointed to reports from institutions (called 13F filings) for the end of 2025. They show that 55% to 75% of BlackRock’s $61 billion IBIT ETF is owned by market makers and arbitrage-focused hedge funds that keep their bets hedged or neutral on bitcoin, not really bullish.
Market makers are entities that create liquidity in an exchange’s order book, facilitating the smooth execution of large buy and sell orders at stable prices. They take advantage of the bid-ask spread and therefore strive to maintain market neutral exposure to avoid price volatility risks. Similarly, arbitrage hedge funds take opposing positions in two markets, such as spot ETFs and futures, to take advantage of the price difference between the two.
Both units therefore do not add directional pressure (bullish/bearish) to the market.
Thielen added that market makers trimmed exposure by about $1.6 billion to $2.4 billion during the fourth quarter as bitcoin traded near $88,000, reflecting “declining speculative demand and reduced arbitrage inventory requirements.”
