Bitcoin exchange-traded funds (ETFs) are demonstrating notable resilience in the face of significant market volatility, holding onto billions in assets even as the price of bitcoin experiences dramatic shifts. However, analysts caution that this stability may not necessarily signify bullish sentiments among long-term investors.
Following an impressive peak where bitcoin reached over $126,000 in early October, the cryptocurrency recently saw its value plummet to nearly $60,000. Despite this drastic decrease in price, the 11 spot bitcoin ETFs listed in the United States have recorded only $8.5 billion in net outflows, leaving them with an impressive $85 billion in assets under management. This figure accounts for more than 6% of bitcoin’s total supply.
Insights gathered from experts at Consensus Hong Kong highlight that the current stability of these ETFs is largely attributed to market makers and arbitrageurs. These entities frequently engage in buying and selling activities, opting for short-term trading rather than long-term holding strategies focused on price appreciation.
Markus Thielen, founder of 10x Research, noted that the structural dynamics of ETF ownership reveal a dominant presence of market makers and hedge funds that employ hedged, 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 mentioned in a recent client note.
Moreover, analysis of institutional 13F filings from late 2025 indicates that a substantial portion—between 55% to 75%—of BlackRock’s IBIT ETF, valued at $61 billion, is comprised of holdings by market makers and arbitrage-focused hedge funds. These actors typically maintain hedged or neutral positions, suggesting a lack of genuine bullish sentiment toward bitcoin.
Market makers play a crucial role in providing liquidity within an exchange’s order book, ensuring that large buy and sell orders can be executed smoothly at stable prices. By profiting from the bid-ask spread, they aim to avoid exposure to price volatility risks. Similarly, arbitrage hedge funds engage in tactics that capitalize on price discrepancies between different markets, such as spot ETFs and futures, which further diminishes directional market pressures.
Thielen further noted that during the fourth quarter, market makers reduced their exposure by approximately $1.6 billion to $2.4 billion as bitcoin hovered around $88,000. This trend signals a reduction in speculative demand and a decrease in arbitrage inventory requirements.
In summary, while the sustained asset levels within bitcoin ETFs may initially appear to indicate confidence in the market, the underlying dynamics driven by market makers and arbitrageurs suggest a more cautious and strategic approach, rather than outright bullishness from long-term investors.
