Bitcoin ETFs Bleed $104.9M as Mystery Buyer Emerges

Key Insights

• U.S. spot Bitcoin ETFs logged fresh weekly outflows.
• Trading activity slowed sharply from early February peak.
• Institutions rotated exposure across IBIT positions.

US spot Bitcoin ETFs recorded $104.9 million in net outflows on Tuesday, marking the first trading session of the week. Trading volume slid to just over $3 billion, reflecting reduced activity across major issuers. The withdrawals came as fourth-quarter filings revealed sharp institutional repositioning in BlackRock’s iShares Bitcoin Trust.

The Bitcoin ETF market entered a consolidation phase after February’s surge in participation. Flow data showed capital rotating rather than exiting entirely, while disclosures revealed diverging institutional strategies. That divergence shaped the latest Bitcoin ETF narrative, with new entrants offsetting aggressive reductions elsewhere.

Institutional Flows Diverge Sharply

SoSoValue data showed that aggregate turnover contracted from a Feb. 5 record of $14.7 billion, signaling cooling momentum across desks. The slowdown followed weeks of choppy price action, which compressed arbitrage spreads and reduced short-term trading incentives. Lower liquidity often amplifies headline sensitivity in exchange-traded products.

United States Securities and Exchange Commission filings revealed that Jane Street ranked as the second-largest buyer of IBIT during the fourth quarter, accumulating $276 million worth of shares. At the same time, a little-known Hong Kong entity named Laurore disclosed a single $436.2 million IBIT purchase. The filing listed Zhang Hui as the reporting individual, a common Chinese name with no public footprint.

Bitwise adviser Jeff Park suggested the Laurore position could signal early institutional Chinese capital entering Bitcoin exposure through regulated vehicles. He noted the absence of public corporate information, raising questions about structure and motive. Market commentators countered that direct Bitcoin ownership would bypass management fees, complicating the capital flight thesis.

Large Holders Rebalance Exposure

Zerohedge compiled additional filings showing that Weiss Asset Management added roughly 2.8 million IBIT shares valued at $107.5 million. 59 North Capital also expanded exposure by acquiring 2.6 million shares worth $99.8 million. Meanwhile, Abu Dhabi sovereign investor Mubadala Investment increased its IBIT allocation by 45%, lifting holdings from 8.7 million shares in the prior quarter to 12.7 million shares valued at $630.7 million.

In contrast, Brevan Howard slashed its IBIT position by about 85%, reducing holdings from 37 million shares valued at $2.4 billion to 5.5 million shares worth $273.5 million. The reduction represented one of the most aggressive institutional pullbacks in the filing cycle. Goldman Sachs also trimmed exposure by roughly 40%, leaving close to $1 billion allocated to the product.

Such dispersion indicated that institutions treated Bitcoin ETFs as tactical balance-sheet tools rather than static allocations. Some desks expanded exposure into quarter-end, while others locked in gains or reduced volatility risk. This rebalancing occurred as Bitcoin traded at $67,789 during the reporting window.

Liquidity Compression And Product Logic

Market structure data suggested that reduced turnover dampened intraday volatility relative to February’s peak session. As spreads narrowed, arbitrage opportunities declined, reducing high-frequency participation. That reaction mirrored historical ETF behavior during consolidation phases.

Product design also shaped capital flows. Exchange-traded funds offer custodial simplicity and regulatory clarity, which appeals to institutions restricted from holding spot Bitcoin directly. However, fee structures and tracking considerations sometimes push sophisticated players toward direct custody when liquidity conditions favor it.

The fourth-quarter filings showed that some investors favored IBIT as a strategic proxy for Bitcoin price exposure. Others appeared to treat it as a liquidity instrument tied to broader macro positioning. That dynamic created simultaneous inflows and outflows without signaling uniform sentiment.

Short-term activity cooled, yet long-term positioning remained visible in sovereign and hedge fund disclosures. Regulatory transparency forced quarterly visibility into those allocations, making the Bitcoin ETF complex a barometer for institutional appetite. The latest round suggested redistribution rather than broad capitulation.

Bitcoin ETF flows often correlate with liquidity cycles and macro expectations. When volatility contracts and price momentum stalls, tactical desks frequently trim positions. Conversely, new entrants tend to build exposure during consolidation, seeking asymmetric upside.

The next catalyst will likely emerge from upcoming monthly flow data, which could confirm whether the slowdown persists or stabilizes. If turnover remains subdued, Bitcoin ETF allocations may continue to rotate among institutional holders rather than expand collectively.