Bitcoin ETFs hold billions after price crash, but resilience masks harsh reality

Bitcoin ETFs’ Resilience Isn’t What It Seems: Market Makers, Not True Believers, Are Keeping Billions Afloat

Bitcoin’s rollercoaster ride took another dramatic plunge recently, with prices crashing from a dizzying $126,000 peak in early October down to nearly $60,000. Yet, amidst this brutal downturn, something unexpected happened: the 11 spot Bitcoin ETFs listed in the U.S. barely flinched. Despite the carnage, these funds have only seen a modest $8.5 billion in net outflows and still hold a staggering $85 billion in assets under management—representing over 6% of Bitcoin’s entire supply.

At first glance, this resilience might seem like a bullish signal, a sign that investors are holding firm, believing in Bitcoin’s long-term potential. But according to one sharp-eyed analyst, the truth is far less inspiring. The real story, he says, is that market makers and arbitrageurs—not die-hard Bitcoin believers—are the ones keeping these ETFs afloat.

The Real Players Behind the Scenes

Markus Thielen, founder of 10x Research, explains that the stability of these ETFs doesn’t come from long-term “hodlers” or institutional investors betting big on Bitcoin’s future. Instead, it’s the work of market makers and arbitrage-focused hedge funds, who trade in and out of these funds, keeping their positions hedged and neutral.

Market makers are the unsung heroes (or villains, depending on your perspective) of the financial markets. They create liquidity, ensuring that large buy and sell orders can be executed smoothly without causing wild price swings. They make their money from the bid-ask spread and, crucially, they don’t take directional bets on the market. Similarly, arbitrage hedge funds exploit price differences between markets—say, between spot ETFs and futures—without caring whether Bitcoin goes up or down.

The Numbers Don’t Lie

Thielen points to 13F filings from late 2025, which reveal that a whopping 55% to 75% of BlackRock’s IBIT ETF—the largest Bitcoin ETF with $61 billion in assets—is owned by these market makers and arbitrage funds. These entities are not in it for the long haul; they’re in it for the quick, risk-free profits.

During the fourth quarter, as Bitcoin traded near $88,000, market makers actually reduced their exposure by around $1.6 billion to $2.4 billion. This trimming reflects “declining speculative demand and reduced arbitrage inventory requirements,” Thielen notes.

So, What Does This Mean for Bitcoin?

The takeaway here is that the resilience of Bitcoin ETFs isn’t a sign of unwavering faith in the cryptocurrency. Instead, it’s a testament to the efficiency of the financial machinery that keeps these funds running. Market makers and arbitrageurs are simply doing their jobs, ensuring liquidity and exploiting price inefficiencies, regardless of Bitcoin’s price direction.

For true believers in Bitcoin, this might be a sobering realization. The billions held in these ETFs aren’t necessarily a vote of confidence in Bitcoin’s future—they’re just the byproduct of sophisticated financial strategies.

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