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Bitcoin Ownership Is Shifting as Hedge Funds Cut Exposure and Banks Increase Holdings
Bitcoin ownership patterns changed in the first quarter of 2026, as hedge funds and brokerage firms reduced risk during the market downturn, while banks, governments and private equity firms increased their positions, according to data published in a recent CoinShares report.
The quarter was marked by a decline in professional investors’ holdings, as Bitcoin underwent a 22% correction, prompting several short-term market participants to reduce risk. At the same time, another group of investors continued to increase exposure, leading to a shift in Bitcoin allocation across institutional categories.
Professional Investors Reduce Their Bitcoin Holdings
Professional investors reduced their Bitcoin exposure by about 52,500 $BTC during the quarter, lowering their total holdings from 313,000 $BTC to 261,000 $BTC. Their share of total US spot Bitcoin ETF holdings also fell from 24.7% to 20.8%, marking one of the largest quarterly reductions since the launch of spot Bitcoin ETFs.
Hedge funds accounted for the largest part of the decline. Holdings in the sector fell by 31,400 $BTC, reflecting a 39% quarter-on-quarter decline and a 42% decrease compared with the same period a year earlier. According to the report, negative perpetual futures funding rates and reduced profitability of basis trades contributed to the reduction in positions.
Brokerage firms also cut exposure by 18,800 $BTC during the quarter. Morgan Stanley exited an 8,300 $BTC position, while Jane Street reduced its holdings by 10,800 $BTC. The report said Morgan Stanley’s move likely coincided with the launch of its own Bitcoin ETF, while Jane Street’s reduction in holdings coincided with weaker ETF flows during that period.
Banks and Sovereign Investors Expand Positions
While trading-oriented participants reduced their holdings, banks increased their exposure to Bitcoin. Combined bank holdings rose by 7,800 $BTC, more than doubling to 15,200 $BTC.
JPMorgan Chase added 3,000 $BTC, Wells Fargo increased its holdings by 4,000 $BTC, and Italy’s Intesa Sanpaolo entered the market with a 1,600 $BTC position. Citigroup also appeared in filings for the first time, holding 97 $BTC.
Government holdings increased by 1,100 $BTC, entirely attributed to Abu Dhabi’s Mubadala fund. This brought sovereign Bitcoin holdings to 8,300 $BTC by the end of the quarter.
Private equity firms also expanded their exposure. Holdings in this category rose by 24% compared with the previous quarter and by 124% year-on-year.
Advisers Remain the Largest Holder Group
Investment advisers showed comparatively limited changes during the quarter. Adviser holdings fell by 9,400 $BTC, or 5.9%, ending the quarter at 150,300 $BTC.
Despite the decline, advisers remained the largest holder category, accounting for roughly 58% of all Bitcoin holdings reported through 13F filings. The report also noted that 159 new advisers entered the market during the quarter, while 321 fully exited their positions.
Beyond trading activity, several changes took place during the quarter, including progress on SEC and CFTC classification, the Department of Labor’s proposed 401(k) rule and the expansion of Bitcoin-backed lending products.
