Bloomberg: Hedge Funds That Fueled U.S. Bitcoin ETF Craze Are Now Rushing to Exit, Bitcoin ETF Holdings Drop 28% Q4 2025

BlockBeats News, February 23rd, according to Bloomberg, hedge funds that once fueled the frenzy around a U.S. Bitcoin exchange-traded fund (ETF) are rapidly exiting. Data compiled by crypto exchange Kraken's wholly-owned subsidiary CF Benchmarks shows that during the third to fourth quarter of 2025, the largest hedge funds' overall allocation to Bitcoin ETFs dropped by 28%.

CF Benchmarks' Head of Research, Gabe Selby, wrote in a research report on February 19th: "The dominant theme of the past two quarters has been hedge fund derisking. The post-October rally pullback appears to have triggered a systemic deleveraging."

Brevan Howard significantly adjusted its holdings in the iShares Bitcoin Trust under BlackRock, becoming the largest seller of the spot ETF in the fourth quarter. Its holdings shrank by approximately 86% to 5.5 million shares, reducing its spot position value from around $2.4 billion to $275 million. Bitcoin's price dropped alongside macro risks, with declines at certain points even more significant, undermining the previously pitched narrative to institutional investors that Bitcoin could hedge against inflation, currency depreciation, or stock market pressure.