A significant portfolio realignment within the institutional investment landscape occurred during the first quarter of 2025, marked notably by the State of Wisconsin Investment Board’s (SWIB) complete exit from its holdings in spot Bitcoin exchange-traded funds (ETFs).
Institutional Shifts in Q1 2025
Regulatory filings indicate that the State of Wisconsin Investment Board liquidated its entire position in the iShares Bitcoin Trust (IBIT) during the initial three months of 2025. This divestment encompassed over 6 million shares, valued at approximately $355.6 million at the time. This move followed SWIB’s earlier sale of its complete $63.7 million holding in the Grayscale Bitcoin Trust (GBTC) prior to the first quarter.
Managing assets exceeding $166 billion as of late 2024, SWIB’s Bitcoin ETF investments constituted a relatively small portion, around 0.2% of its total portfolio, before these sales. The board’s decision to fully divest came just a quarter after it had reportedly increased its IBIT shares and shifted its entire GBTC holding into IBIT in Q4 2024.
SWIB’s actions were reflective of a broader trend among sophisticated asset managers and hedge funds who adjusted their exposure to spot Bitcoin ETFs throughout Q1 2025. This period saw Bitcoin’s price decline by about 12%. According to Matt Hougan, CIO at Bitwise Asset Management, hedge funds engaging in the “basis trade” (profiting from the spread between spot and futures prices) began reducing their positions as the premium on Bitcoin futures collapsed towards the end of March, diminishing the profitability of this strategy.
Other significant players also recalibrated their portfolios. Millennium Management, for example, cut its IBIT holdings by 41% but increased its stake in the ARK 21 Shares Bitcoin ETF and the Grayscale Bitcoin Mini Trust, while also exiting its position in the Invesco Galaxy Bitcoin ETF. Jersey-based Brevan Howard trimmed its iShares ETF stake by 15.6%. In contrast, Abu Dhabi’s Mubadala sovereign wealth fund expanded its IBIT investment, bringing its total to 8,726,972 shares.
Adding a new participant to the crypto ETF market, Brown University made its initial investment in Q1 2025, acquiring a $4.9 million stake in IBIT.
Spot Bitcoin ETF Flow Dynamics
Recent data on spot Bitcoin ETF net flows highlights considerable volatility, particularly observed in mid-May. A notable reversal in flows occurred between May 13th and May 14th.
On May 13th, spot Bitcoin ETFs recorded a net outflow of $91.4 million, marking the largest daily withdrawal since late April. This outflow was primarily driven by redemptions from Fidelity’s FBTC, which accounted for the entire sum with no offsetting inflows across other issuers.
However, the trend sharply shifted on May 14th, with spot Bitcoin ETFs attracting substantial net inflows totaling $319.5 million. BlackRock’s IBIT led the charge with $232.9 million in new capital, followed by Fidelity’s FBTC with $36.1 million. Other positive contributions came from Bitwise’s BITB, Ark’s ARKB, and Valkyrie’s BRRR. Interestingly, Grayscale’s GBTC also saw a modest inflow of $35.2 million on this day, breaking its recent pattern of consistent outflows.
The strong performance on May 14th largely offset the previous day’s outflows, contributing to overall positive monthly flow trends for spot Bitcoin ETFs and representing one of the strongest daily performances observed in May.
Jason Walker, aka “Crypto Maverick,” is the energetic new member of cryptovista360.com. With a background in digital finance and a passion for blockchain, he makes complex crypto topics engaging and accessible. His mix of analysis and humor simplifies volatile market trends. Outside work, Jason explores tech, enjoys spontaneous road trips, and American cuisine. Crypto Maverick is ready to guide you through the ever-changing crypto landscape with insight and a smile.