DECRYPT · 2026-10-29 12:30 UTC

Morning Minute: Hedge Funds Left the BTC ETF Trade and Sovereign Wealth Stepped In

Hedge funds sold approximately 68,000 Bitcoin worth of ETF shares over nine months (October 2025 through June), worth roughly $5.4 billion, as the arbitrage spread between spot and futures narrowed from 7.9% to 4.8% annually. Sovereign wealth funds and wealth managers including Morgan Stanley, Mubadala, and Abu Dhabi Investment Council bought roughly 20,000 Bitcoin during the same period, while retail investors held steady with only 6.6% reduction. BTC ETFs saw $137M net inflows; since June, institutional funds have added back 87,000 Bitcoin as straightforward buying rather than arbitrage…

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