Bitcoin exchange-traded funds (ETFs) still hold billions of dollars in assets despite the tumbling price of Bitcoin, but that staying power isn’t necessarily the bullish sign many believe it to be.
One analyst said the resilience stems from incoming and outgoing trades by market makers and arbitrageurs, rather than die-hard long-term holders betting on price appreciation.
Bitcoin’s The price peaked above $126,000 in early October and recently fell to nearly $60,000. Despite the price halving, the cumulative net outflows of the 11 spot Bitcoin ETFs listed in the United States were only US$8.5 billion. These funds still manage $85 billion in assets, equivalent to more than 6% of the Bitcoin supply.
Some analysts, including those interviewed by CoinDesk at Consensus Hong Kong last week, cited the same data as evidence of bullish positions.
Markus Thielen, founder of 10x Research, said this resilience comes not only from long-term holders but also from market makers and arbitrageurs who have hedging, non-directional positions.
“This reflects the structural nature of ETF ownership, which is dominated by market makers and arbitrage-focused hedge funds holding large hedging 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 the end-2025 agency report, known as the 13F filing. Reports show that 55% to 75% of the BlackRock IBIT ETF (which holds $61 billion) is owned by market makers and arbitrage-focused hedge funds who maintain hedged or neutral bets and are not truly bullish on Bitcoin.
Market makers are entities that create liquidity in an exchange’s order book, helping to seamlessly execute large buy and sell orders at stable prices. They profit from the bid-ask spread and therefore strive to maintain market neutral exposure to avoid the risk of price fluctuations. Likewise, arbitrage hedge funds take opposite positions in two markets (such as spot ETFs and futures) to profit from the price difference between the two markets.
Therefore, neither entity will inject directional pressure (bullish/bearish) into the market.
Thielen added that with Bitcoin trading near $88,000, market makers cut exposure by about $1.6 billion to $2.4 billion in the fourth quarter, reflecting “lower speculative demand and reduced arbitrage inventory requirements.”