Investing.com -- Several prominent asset managers reduced their exposure to spot bitcoin exchange-traded funds (ETFs) in the first quarter of 2025, as the cryptocurrency’s price slid 12%, according to newly released regulatory filings.

This marks a departure from earlier quarters when institutional investors had consistently increased their allocations to Bitcoin ETFs. The filings reveal a more nuanced picture, with hedge funds trimming positions while some financial advisory firms and sovereign wealth funds selectively added to their holdings.

“What we witnessed in the first quarter was the collapse of the premium that people were paying for bitcoin futures, which had set up a very lucrative basis trade,” said Matt Hougan, CIO at Bitwise Asset Manager, in comments reported by Reuters.

Hedge funds were previously earning annualized returns of around 15% by exploiting the difference between spot and futures prices. “But that premium collapsed and reached its nadir around the end of March,” he added. “So I’m not surprised to see hedge funds trim their holdings.”

Among the notable moves, Millennium Management slashed its stake in the iShares Bitcoin Trust ETF (NASDAQ: IBIT ) by 41% to 17.6 million shares and exited its position in the Invesco Galaxy Bitcoin ETF (NYSE: BTCO ). It did, however, increase its holdings in the ARK 21Shares Bitcoin ETF (NYSE: ARKB ) and the Grayscale Bitcoin Mini Trust ETF (NYSE: BTC ).

Brevan Howard, based in Jersey, also scaled back, cutting its iShares ETF stake by 15.6%.

Moreover, the State of Wisconsin Investment Board, which made headlines in early 2024 for being among the first major institutions to back spot bitcoin ETFs, sold its entire six million-share holding in the iShares ETF during the quarter.

At the same time, a few institutions entered or expanded their positions. Brown University disclosed a new $4.9 million investment in the iShares Bitcoin Trust ETF, marking its debut in crypto ETFs.

Abu Dhabi’s Mubadala fund increased its exposure as well, bringing its stake in the same fund to over 8.7 million shares, valued at $408.5 million at the end of March.

“What will be most important for me is whether, when all the data is finally in and we can analyze it, more investment advisory firms are stepping in,” Hougan said. “That wave of adoption may be a slow-moving train, but it has forward momentum.”