Galaxy: Banks and Hedge Funds, Not Retail, Led the Bitcoin ETF Exodus

A research report from Galaxy Digital, published Monday (Oct. 26) and summarized by Decrypt on Oct. 29, pins almost all of the institutional selling in U.S. spot Bitcoin ETFs during this year's downturn on a narrow group of players: a handful of hedge funds and banks. On the other side of those trades, Galaxy says, sat wealth-management platforms and sovereign funds, which were net buyers.

The one hard, primary-sourced number in the account comes from quarterly 13F filings to the SEC: institutions required to disclose their holdings reported owning 355,000 BTC worth of spot ETF shares at the end of September. Beyond that snapshot, the specific fund names, dollar figures, and the size of the buying offset weren't detailed in the report as summarized.

Decrypt's headline also attaches a second, separate data point — from Glassnode, not Galaxy — that roughly 4 million BTC was accumulated above $85,000 and could "cap" any recovery, since holders who bought near that level become sellers as price approaches their break-even. That figure appears only in the framing; the body didn't substantiate or expand on it.

Key facts

• 355,000 BTC in spot Bitcoin ETF shares held by 13F-filing institutions at end of September — SEC 13F filings, via Galaxy Research (Decrypt, Oct. 29).
• Galaxy attributes "almost all" institutional ETF selling during the 2026 slump to a handful of hedge funds and banks (Galaxy Research report, Oct. 26).
• Galaxy identifies wealth platforms and sovereign funds as net buyers over the same period (same report).
• ~4 million BTC reportedly bought above $85,000, framed as a potential overhang on recovery — Glassnode (cited in Decrypt's headline).

The real-world read

The flattering narrative here — flighty Wall Street out, patient sovereigns in — is Galaxy's. Galaxy is a crypto-native firm with a direct interest in the story that long-horizon institutions are absorbing supply; treat the framing as an interested party's, and the hard data as the 13F figure alone. That figure has real limits: 13Fs capture only U.S. managers above the reporting threshold, are quarter-end snapshots (end-September here, before the latest moves), and many sovereign wealth funds don't file them at all — so "sovereign funds stepped in" is an assertion the disclosed data doesn't obviously carry. No specific sovereign buyer was named.

Note too that the two cited data shops point opposite ways in the same write-up: Galaxy's read leans constructive, while the Glassnode 4M-BTC-above-$85K point is an overhang argument. The headline staples them together without reconciling them, and the Glassnode figure arrives unsupported in the text. Where the numbers beyond the September snapshot sit, the report doesn't say.

Opinion, and whose

• That a narrow set of hedge funds and banks drove the selling while wealth and sovereign channels bought: Galaxy Research's interpretation.
• That ~4M BTC acquired above $85K could cap a recovery: attributed to Glassnode.

Sources

• Decrypt (Oct. 29, 2026) — secondary reporting; summarized Galaxy's report and carried the Glassnode figure in its headline. It cited Galaxy Research and Glassnode as the underlying sources.
• Galaxy Research report (Oct. 26, 2026) — primary analysis from a crypto firm; an interested party in the asset class, treat its framing accordingly.
• SEC 13F filings — primary source for the 355,000 BTC holdings figure.

Not financial advice.