Bitcoin ETFs are still sitting on huge piles of bitcoin — but that stability may be hiding a less bullish story. Despite a sharp collapse in BTC’s price (peaking above $126,000 in early October and recently tumbling toward $60,000), the 11 U.S. spot bitcoin ETFs have only recorded about $8.5 billion in net outflows and together still manage roughly $85 billion in assets — representing more than 6% of bitcoin’s supply. That headline figure has been widely cited at events such as Consensus Hong Kong as evidence of strong institutional demand. But analysts warn the durability of ETF holdings doesn’t necessarily mean investors are placing directional bets on higher bitcoin prices. Markus Thielen, founder of 10x Research, tells clients the picture is dominated by market makers and arbitrage-focused hedge funds that hold largely hedged, non‑directional positions. In other words, many ETF units are owned by players who trade in and out to capture spreads and arbitrage opportunities, not by long-term “hodlers” betting on price appreciation. Thielen points to institutional 13F filings covering late 2025 that suggest 55%–75% of BlackRock’s IBIT — the largest ETF at about $61 billion AUM — is owned by market makers and arbitrage desks. Those firms typically neutralize market exposure: market makers earn the bid-ask spread and aim to remain market-neutral to avoid price risk, while arbitrage funds take offsetting positions (for example, between spot ETF shares and futures) to profit from price differentials. Neither group injects sustained bullish or bearish pressure into the market. He also notes that market makers trimmed their exposure by roughly $1.6 billion to $2.4 billion in Q4, when bitcoin was trading near $88,000 — a sign of falling speculative demand and shrinking arbitrage inventory needs as volatility and spreads changed. Bottom line: large ETF AUMs are an important part of the market plumbing and provide liquidity, but headline ETF balances can mask a composition that’s far less bullish than it appears. Traders and investors looking for conviction should watch ownership breakdowns, market-maker inventories and arbitrage flows — not just headline ETF asset totals. Read more AI-generated news on: undefined/news

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