Institutional investors’ share of Bitcoin spot exchange-traded funds fell sharply in the first quarter, data showed.

CoinShares’ analysis of 13F filings showed institutional investors’ exposure to Bitcoin spot ETFs fell about 17 percent to 261,000 BTC from 313,000 BTC, blockchain media outlet Cointelegraph reported on Wednesday.

The value of holdings fell 35 percent over the same period to $17.8 billion. The share of Bitcoin spot ETF total assets held by investors covered by 13F filings slipped to 20.8 percent from 24.7 percent. A 13F is a quarterly disclosure of stock holdings filed by investment managers with at least $100 million in assets under management.

Selling was concentrated among hedge funds and securities firms. The two groups accounted for about 96 percent of the total decline in exposure. Hedge funds cut holdings by 31,400 BTC, down 39 percent, and securities firms reduced holdings by 18,800 BTC, a 53 percent drop.

Investment advisers remained the largest group of professional investors, holding 150,300 BTC. Their exposure fell 5.9 percent. Banks added 7,800 BTC during the quarter, more than doubling their Bitcoin spot ETF holdings.

The trend suggests not a broad exit by institutional investors but widening differences among investor types. Hedge funds and securities firms, which are sensitive to price swings, cut exposure quickly, while investment advisers and banks showed relatively conservative adjustments or additional buying.

The shift coincided with a Bitcoin price pullback. Bitcoin fell 22 percent in the first quarter and at one point dropped below $60,000 amid weakness that has continued since late 2025. From the low, it was about 50 percent below the record high of more than $126,000 set in October 2025.

On regulation, moves that could support long-term growth have continued. U.S. regulators pushed measures to clarify supervisory boundaries between the Securities and Exchange Commission and the Commodity Futures Trading Commission, and also put forward proposals related to how digital assets are handled in retirement accounts. The SEC, in a draft 2030 strategic plan released this week, listed digital assets as a strategic priority.

Acceptance in traditional finance also appears to be expanding. BlackRock assessed earlier this year that Bitcoin could play a role in modern portfolios. The market is also watching whether the Clarity bill, which includes a regulatory framework for overall digital asset market structure, will be passed. The bill is under review by the banking sector, and some lawmakers believe it could be put to a Senate vote as early as August.

The key question ahead is whether ETF fund flows recover alongside a price rebound. Even as the institutional share has declined, holdings by investment advisers and banks have been maintained or increased, and the market is expected to focus on how much capital with a long-term holding character remains rather than short-term selling pressure.