Several funds trimmed their Bitcoin [BTC] exposure in Q1 2025.

Surprisingly, the state of Wisconsin exited its entire $321 million (100%, orange) in BlackRock iShares Bitcoin ETF (IBIT), according to recent 13-F filings with the SEC.

Several funds trimmed their Bitcoin [BTC] exposure in Q1 2025.

Surprisingly, the state of Wisconsin exited its entire $321 million (100%, orange) in BlackRock iShares Bitcoin ETF (IBIT), according to recent 13-F filings with the SEC. Mentioned in a report by the U.S. Securities and Exchange Commission.

Source: Fintel (IBIT Q1 2025 allocation)

The average portfolio allocation in IBIT dropped by 15.6% in the past quarter, data from Fintel showed.

BTC ETF- Q1 rebalance

Additionally, Millennium Management LLC slashed its IBIT position by 41% to 17.6 million shares and closed its position in the Invesco Galaxy Bitcoin ETF (BTCO).

However, the fund added BTC-related exposure from Ark 21Shares and Grayscale Mini.

Another hedge fund, Brevan Howard, reduced its IBIT holdings by 15.6%.

The rebalancing and reduced exposure weren’t surprising given the market headwinds seen in Q1 2025 amid tariff wars.

Over the same period, BTC dropped about 12% in the first three months of the year, up from $109K to $76K.

Bitwise CIO, Matt Hougan, told Reuters that the cautious approach may be due to reduced basis trade — the price difference (premium) funds get when they buy spot BTC ETF and short CME BTC Futures. He said,

“But that premium collapsed and reached its lowest around the end of March. So I’m not surprised to see hedge funds trim their holdings.”

Source: Velo (BTC annualized basis trade)

The premium was lucrative and hit a whopping 15%-20% annualized returns in late 2024, added Hougan.

However, the basis trade sharply dropped below 4% in March, and may partly explain the reduced interest in the products.

In Q2 2025, the premium surged to 9% but has slightly eased below 8% at the time of writing. A similar picture was painted by the demand for spot BTC ETFs. In February and March, the products saw over $4B in outflows.

Source: Soso Value

However, in April and the first half of May, they have seen $5.2 billion in inflows, a renewed demand that lifted BTC above $100K for the first time since February.

From a market snapshot, current BTC levels reflected a bull mode seen before the November massive run-up, according to the CryptoQuant Bull Score Index reading of 80.

Source: CryptoQuant

More inflows into U.S. spot BTC ETFs could rally BTC higher. However, any faltering in demand for the products could likely lead to a local top for the crypto asset. It traded at $103K at press time.