Nine firms including Millennium Management, Goldman Sachs and Tudor Investment unloaded a combined 68,000 BTC worth of U.S. spot Bitcoin ETF holdings — exceeding the 48,000 BTC decline recorded across all 13F filers — while Morgan Stanley's wealth management arm, Mubadala and the Abu Dhabi Investment Council were among the buyers.

That is the central finding of a Galaxy Research report published Monday, which concluded that a small group of hedge funds and banks drove nearly all of the institutional selling in U.S. spot Bitcoin ETFs during Bitcoin's 2026 slump, while wealth platforms and sovereign funds stepped in on the other side.

Institutions that file quarterly 13F reports with the SEC — disclosures that capture large institutional managers' long positions in U.S.-listed securities only after each quarter ends — held 355,000 BTC worth of spot ETF shares at the end of September 2025, just before Bitcoin's all-time high. By June 2026, that figure had fallen to 307,000 BTC, a 14% drop, according to the report.

Nine firms account for more than the entire decline: Millennium Management, Brevan Howard, Goldman Sachs, Capula Management, Farallon Capital, D.E. Shaw, Schonfeld Strategic Advisors, Symmetry Investments and Tudor Investment. Together, they cut 68,000 BTC worth of exposure — roughly $5.4 billion at current prices — trimming their positions by between 29% and 100%. The remaining roughly 2,200 filers collectively added about 20,000 BTC, worth approximately $1.6 billion.

Morgan Stanley's wealth management arm, Abu Dhabi's Mubadala and the Abu Dhabi Investment Council — both state-backed investment vehicles — were among the buyers. Advisers, family offices and individuals who do not file 13Fs reduced their holdings by just 6.6% while the price fell 49%.

Alex Thorn, Galaxy's head of firmwide research, said the sellers were largely running a trade rather than making a directional bet on Bitcoin. Many employed a cash-and-carry strategy: buying spot ETF shares while shorting CME Bitcoin futures to pocket the spread between the two, known as the basis.

That spread has nearly vanished. The front-month basis averaged 7.9% annualized in the 30 days before Bitcoin's peak — 3.9 percentage points above three-month Treasury bills. In the 30 days through Oct. 21, it averaged 4.8%, just 0.6 points above bills. After fees, rolling costs and margin requirements, the trade now earns roughly 1.5 points over cash, the report estimates.

That gap over bills is the trade's real compensation, since cash parked in the strategy forgoes the bill yield. "That arithmetic, not the price, is why the multi-strategy desks left," Thorn wrote.

CFTC data on CME Bitcoin futures tells a similar story. Asset managers' net long position fell from 43,300 BTC in the week of Bitcoin's all-time high to 18,400 BTC, a 57% drop. Leveraged funds' net short position — the futures leg of the carry trade — shrank by the same proportion, from 71,400 BTC to 30,600 BTC. Open interest is down 28% in Bitcoin terms and 51% in dollar terms.

Longer-dated contracts still offer some yield. November and December futures priced in 6.3% to 6.5% at the Oct. 21 close, about 2 points over Treasury bills before costs. But Thorn argued that the slim edge does not compensate for the trade's tail risk: in December 2022, the basis inverted to negative 31% annualized.

More broadly, spot ETF holdings fell just 11% from their October 2025 peak to their July trough, while Bitcoin fell 53% over the same period. Since the June low, the funds have added 87,000 BTC, which Galaxy characterizes as directional buying rather than carry.

Net, the numbers describe less an institutional exodus than a changing of the guard among ETF holders — out of leveraged, spread-chasing desks and into wealth channels and state-backed buyers — with the overall pool of ETF-held coins shrinking far less than the price did.

Recent flows have been choppy. Decrypt reported that the ETFs shed nearly $1 billion over two weeks earlier this month before notching their best day in nearly a month on Oct. 19, when BlackRock's IBIT accounted for all of the buying. Since then, a three-day, $1 billion inflow run has been followed by heavy outflows. Bitcoin ETF flows turned green again this week, but in smaller numbers: roughly $286 million in inflows so far.

The 13F data runs through June, meaning it does not capture more recent shifts; the next round of quarterly filings, covering July through September, will show how the two camps' positions evolved through that quarter. Galaxy discloses that it holds Bitcoin.