Bitcoin exchange-traded funds (ETFs) continue to hold billions in assets despite Bitcoin’s brutal price decline, but that staying power isn’t necessarily the bullish sign many have come to believe.
According to one analyst, resilience comes from market makers and arbitrageurs jumping in and out rather than die-hard long-term holders betting on price appreciation.
Bitcoin The price peaked at over $126,000 in early October and recently plummeted to nearly $60,000. Despite the price halving, the 11 US-listed bitcoin spot ETFs have collectively recorded just $8.5 billion in net outflows. These funds still hold $85 billion in assets under management, equivalent to more than 6% of the bitcoin supply.
Several analysts, including those CoinDesk spoke to at Consensus Hong Kong last week, cited the same data as evidence of bullish positioning.
Markus Thielen, founder of 10x Research, says that resilience comes not only from long-term hodlers, but also from market makers and arbitrageurs with covered and non-directional positions.
“This reflects the structural nature of ETF ownership, which is dominated by market makers and arbitrage-focused hedge funds holding largely hedged 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 institutional reports (called 13F filings) from late 2025. They show that between 55% and 75% of BlackRock’s $61 billion IBIT ETF is owned by market makers and arbitrage-focused hedge funds that keep their hedged or neutral, not truly bullish, bets on bitcoin.
Market makers are entities that create liquidity in an exchange’s order book, facilitating the smooth execution of large buy and sell orders at stable prices. They benefit from the bid-ask spread and therefore strive to maintain neutral exposure to the market to avoid the risks of price volatility. Similarly, arbitrage hedge funds take opposing positions in two markets, such as spot ETFs and futures, to profit from the price differential between the two.
Both entities, therefore, do not inject directional pressures (bullish/bearish) into the market.
Thielen added that market makers reduced exposure by about $1.6 billion to $2.4 billion during the fourth quarter while bitcoin was trading near $88,000, reflecting “declining speculative demand and reduced arbitrage inventory requirements.”
