ETF Bitcoin: Hedge funds sold 68,000 BTC, sovereign funds stepped in

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ETFs received 110 million dollars in net inflows on Monday October 26, 176 million on Tuesday 27 then 137 million on Wednesday 28 according to SoSoValue. However, bitcoin fell back below $80,000 this Thursday, October 29, during the Asian session. It is hovering around $79,800 this morning. However, Galaxy places the breakout line of its thesis at $76,540, approximately 4% below the current price.

The first act is read in the 13F declarations. American managers with more than $100 million file their positions with the SEC every quarter. Between the end of September 2025 and the end of June 2026, these institutions reduced their spot Bitcoin ETF holdings from 355,000 to 307,000 BTC. The drop reached 14%. Nine names weigh more than all of hindsight. Millennium, Brevan Howard, Goldman Sachs, Capula, Farallon, D.E. Shaw, Schonfeld, Symmetry and Tudor reduced their lines from 29% to 100%. They sold a total of 68,000 BTC, approximately $5.4 billion at current prices.

In reality, these funds practiced cash-and-carry. The recipe is to buy ETF shares and sell opposite CME futures. The gain comes from the difference between the two prices, called the base. In the 30 days before the record, this base yielded 7.9% annualized. This was 3.9 points higher than three-month Treasury bonds. It then fell to 4.8% on October 21, or 0.6 points above the risk-free rate. “It was this arithmetic, not the price, that drove away multi-strategy desks,” writes Alex Thorn, head of research at Galaxy. His note was released to clients on October 22 and then picked up by Decrypt on October 28.

Furthermore, the American derivatives regulator, the CFTC, measured the same decline on the futures side. On CME bitcoin contracts, the net short position of leveraged funds fell from 71,400 to 30,600 BTC. Open interest melted 51% in dollar terms.

Who took the compensation? Over the same period, the other approximately 2,200 13F filers added around 20,000 BTC, or $1.6 billion. Among them, Galaxy cites the wealth management arm of Morgan Stanley, the Emirati sovereign wealth fund Mubadala and the Abu Dhabi Investment Council, without quantifying their purchases. ETFs have absorbed 87,000 BTC since the June 30 low, nearly $7 billion in the day's price. Galaxy classifies these purchases as directional, in other words without a selling leg in front.

Machine-translated from French