Q2 Wall Street Crypto Rebalancing: BTC Holdings Defy the Trend with a 7.5% Increase, While ETH Exposure Takes the Lead Across the Board

Original author: Zhou, ChainCatcher

August 14 was the statutory deadline for the US SEC requiring institutional investors to submit their Q2 13F filings. After the batch disclosure, Wall Street's crypto holdings were once again laid out on the table.

This quarter's institutional moves formed a stark contrast with price trends. Bitcoin fell roughly 14.2%, yet institutional reported crypto holdings actually increased.

According to Bitcoin Strategy's analysis of 13F data, institutional Bitcoin holdings rose from approximately 498,000 BTC to around 536,000 BTC, a quarter-over-quarter increase of 7.5%. During the same period, total ETF holdings actually declined from roughly 1.297 million BTC to about 1.211 million BTC.

According to SoSoValue data, US spot Bitcoin ETFs saw sustained net redemptions in Q2, with net outflows of approximately $2.4 billion and $4.5 billion in May and June respectively. June marked the worst single month on record since listing. Ethereum ETFs also saw cumulative net outflows of roughly $700 million during the same period.

Meanwhile, holdings are concentrating among top players. The number of institutions reporting Bitcoin holdings dropped from roughly 2,000 to about 1,900. According to Bloomberg data, as of August 13, IBIT alone had around 1,500 institutional holders with net assets of approximately $47.35 billion.

Banks' Ethereum Growth Outpacing Bitcoin Across the Board

In a previous ChainCatcher review of Q1 holdings, we noted that institutional interest in Ethereum allocation was rising—Jane Street, Wells Fargo, and JPMorgan all added Ethereum ETFs during the outflow phase. In Q2, this trend was confirmed on the banking side.

According to DWF Labs estimates, calculated by corresponding crypto asset quantities, Morgan Stanley's BTC exposure grew 3.7% quarter-over-quarter in Q2, while ETH exposure grew 18.6%. JPMorgan's BTC exposure increased 12.2%, and ETH exposure rose 67.3%. Both banks saw significantly higher ETH growth rates compared to BTC.

At the individual level, the picture is even clearer. Morgan Stanley's ETHA position increased approximately 202% to 4.6 million shares. JPMorgan's ETHA grew roughly 338% to nearly 1.17 million shares. Bank of America's ETHA surged from about 67,500 shares to approximately 1.98 million shares—nearly 29 times its previous level.

However, Ethereum spot ETFs actually saw net outflows overall in Q2. SoSoValue data shows April still had net inflows of roughly $356 million, while May and June recorded net outflows of approximately $541 million and $529 million respectively. Q2 combined net outflows totaled around $714 million.

Jane Street Bought Back; Hedge Funds Shifted Positions into Options

Last quarter, Jane Street slashed its IBIT position by roughly 71%, leading the market to speculate it was bearish on Bitcoin. This quarter, it reversed course and added back approximately 24.9 million shares of IBIT—a quarter-over-quarter surge of about 324%—making it one of the quarter's largest buyers. Its current spot Bitcoin ETF exposure stands at roughly $990 million, with about $828 million in IBIT.

As an authorized participant and market maker, its quarter-end inventory is tied to creations/redemptions and hedging activities. A large increase in spot positions does not necessarily equal a directional bet.

It's worth noting that 13F filings only report quarter-end spot long positions. When options are factored in, the profile of several institutions flips dramatically.

Global macro hedge fund Brevan Howard cut its spot IBIT position from 24.3 million shares to 7.21 million shares in Q2—a reduction of approximately 70.4%. But it simultaneously held call options corresponding to roughly 7.23 million shares of IBIT and put options for 5.27 million shares.

Graham Capital reduced its spot IBIT from approximately 926,000 shares to 259,000 shares—a cut of about 72%—while holding put options corresponding to roughly 1.74 million shares of IBIT, with a reported value of approximately $57.94 million. Multi-strategy giant Millennium trimmed its spot IBIT from about 19.29 million shares to 9.69 million shares, a reduction of roughly 49.8%.

UBS's direct IBIT holdings increased only about 12% to 407,890 shares, but its call option positions surged from 80,000 shares to approximately 1.95 million shares—a quarterly increase of over 24 times—while put options were reduced by about 53% during the same period.

In contrast, Paul Tudor Jones's Tudor fund took a rather contradictory approach: it added nearly 20% to its spot IBIT position, bringing it to 688,500 shares and ending nearly a year of reductions, while simultaneously cutting its IBIT-linked call options by roughly 85%, from 998,000 shares down to about 148,000 shares.

Institutions Diverge on Crypto-Related Equities

In our previous article, we noted that crypto-related stocks are becoming an allocation option institutions can no longer avoid. Among them, Strategy is the most representative.

In Q2, Strategy tore a crack in its "never sell Bitcoin" narrative: it sold 32 BTC at the end of May for the first time to pay preferred stock dividends, and on June 29, the board authorized a framework for selling up to $1.25 billion worth of Bitcoin.

13F filings cut off on June 30, and the actually larger sell-off occurred after the quarter. The narrative around Strategy as a BTC proxy has shifted.

Filings show Bank of America cut its Strategy position from approximately 3.97 million shares to about 1.18 million shares—a reduction of roughly 70%. Renaissance Technologies, by contrast, newly purchased 422,900 shares, bringing its total position to 2.55 million shares worth approximately $242 million. BlackRock also increased its MSTR position to roughly 19.39 million shares, valued at about $1.69 billion. However, as the largest index issuer in the market, BlackRock's increase may largely reflect passive index-based allocation.

Renaissance Technologies newly acquired 422,881 shares of Strategy, increasing its total holdings to 2.55 million shares valued at $242.3 million—a 20% increase in share count. Royal Bank of Canada added 46,000 shares of Strategy, bringing its total to approximately 385,000 shares valued at roughly $37.2 million, an increase of 13.5% from its previous position.

Additionally, Circle is one of the few related assets that institutions mutually favor. Morgan Stanley significantly increased its position from approximately 1.46 million shares to about 8.32 million shares, while ARK also added slightly—around 1%—to 4.56 million shares. For Coinbase, the two took completely opposite approaches: Morgan Stanley reduced by roughly 550,000 shares, while ARK added about 5.8% to 2.51 million shares, while also trimming Robinhood by roughly 12.8%.

It's worth noting that ARK's Circle weight dropped from approximately 3.34% in Q1 to 1.85%, though its share count actually increased slightly. The weight decline was mainly due to dilution from a new SpaceX position that enlarged the overall portfolio.

Furthermore, after Morgan Stanley significantly increased its Circle position in Q2, it slashed its CRCL price target from $106 to $38 in early August, arguing that the contraction in USDC supply exposed Circle's sensitivity to reserve income, implying its revenue structure would tilt toward lower-margin transaction revenue.

New Money Entered for the First Time; Old Money Held Steady

In Q2, Spain's Banco Santander disclosed Bitcoin and Ethereum ETF holdings for the first time, though the positions represent a negligible share of its over-$10 billion US equity portfolio. UBS's crypto exposure also continued to rise quarter by quarter, and this quarter it added a new position of roughly $1.5 million in mining company American Bitcoin.

Morgan Stanley also newly established positions in Grayscale's Solana staking ETF and Fidelity's Solana fund, valued at approximately $4.25 million and $2.26 million respectively. JPMorgan also opened a new position in Bitwise's Solana staking ETF and bought back XRP positions it had cleared in Q1, building small positions through Bitwise and Grayscale's XRP funds.

Additionally, investment advisory firm Edelman Financial Engines disclosed holdings of approximately $34 million in spot Bitcoin ETFs, primarily allocated to BlackRock's iShares Bitcoin Trust (IBIT) and Grayscale-related products. While this position remains small within its overall portfolio, it exceeds its roughly $25 million holding in Amazon.

Abu Dhabi's Mubadala and the Abu Dhabi Investment Council each maintained their IBIT positions unchanged at approximately 14.7219 million and 8.2187 million shares respectively—a combined value of about $764 million—pausing a multi-quarter streak of accumulation.

Harvard University's endowment held approximately 3.0446 million shares of IBIT, valued at about $101.4 million—exactly unchanged from the end of Q1—ending two consecutive quarters of reductions. Meanwhile, its gold holdings in iShares Gold Trust and SPDR Gold Trust totaled approximately $171.2 million, now exceeding its Bitcoin position.

Signals from Institutional Crypto Allocation Shifts

Looking at this quarter's institutional moves together, several directional signals are taking shape.

First, ETF flows and institutional behavior are decoupling—institutional adoption of crypto assets is deepening.

Second, institutions are increasingly diverging on crypto-related equity targets, especially after Strategy began selling Bitcoin.

Additionally, Ethereum has become a clear institutional buy, and Q3 fund flows are following suit.

According to SoSoValue data, Ethereum ETFs saw net inflows of approximately $365 million in July and roughly $243 million so far in August—a combined total exceeding $600 million over two months. ETH's price has recovered from around $1,570 at the end of June to approximately $1,900 now, a gain of about 20%.

Even Ethereum treasury company BitMine has strengthened in tandem, with its stock rising from about $13.3 at the end of June to nearly $19—a gain of roughly 40%.