Analysts such as Willy Woo warn that Bitcoin is still in the early stage of a broader bear cycle, with global risk markets likely to influence the next phase.
A recent report by 10x Research reveals that Bitcoin exchange traded funds (ETF) have experienced only a limited reduction in cryptos despite a sharp price correction in Bitcoin. Bitcoin has fallen about 46% from its high, but total Bitcoin ETF outflows have reached just $8.5 billion.
The report reveals that these data points to a market structure dominated by professional liquidity providers. Market makers and arbitrage focused hedge funds continue to account for a large share of ETF ownership. Their positions are largely hedged or neutral. As a result, flows into and out of ETFs do not always reflect directional conviction on Bitcoin’s price. Instead, they mirror trading strategies built around spreads, liquidity provision, and arbitrage windows.
Long term institutional investors form another important component of ETF ownership. These holders usually maintain lower turnover and longer time horizons. Their presence has helped stabilize overall ETF balances even as Bitcoin’s price has declined. This mix of participants has shaped how capital has moved during the current cycle.
Filings for the Q4 of 2025 show that between 55 percent and 75 percent of the roughly $61 billion held in BlackRock’s IBIT vehicle remains in the hands of market makers and arbitrage oriented funds. During the same period, Bitcoin traded in a consolidation band near $88,000. In that environment, market makers trimmed exposure by an estimated $1.6 billion to $2.4 billion. The trimmed exposure implies weaker speculative demand and fewer arbitrage opportunities as price volatility narrowed.
The report argues that these structural dynamics explain why ETF outflows have been limited even as sentiment has weakened. Hedged positioning reduces the need for rapid exits. At the same time, long only institutional capital tends to move slowly and is less reactive to short term price swings.
Meanwhile, market analyst Willy Woo has discussed another framework for Bitcoin’s current market phase. He describes a three stage bear cycle driven by liquidity conditions and global risk sentiment. In the first stage, liquidity contracts and Bitcoin begins to go down. Woo places the start of this phase in the third quarter of 2025, when capital flows into crypto markets slowed sharply. Bitcoin, as a relatively small asset compared with global equities, tends to react quickly to shifts in liquidity.
The second stage involves a wider downturn across global risk assets. Equity markets weaken and capital rotates out of speculative sectors. Woo suggests this phase is approaching as macro conditions tighten. The final stage is characterized by stabilizing liquidity and a return of investor demand, often accompanied by a final price decline before recovery begins.
Recent data shows mixed activity across crypto ETFs. US Bitcoin spot ETFs recorded a net outflow of $104.9 million in the latest session. BlackRock’s IBIT product saw $119.7 million in net outflows, while Grayscale’s Bitcoin vehicle posted a net inflow of $36 million. Ethereum spot ETFs, in contrast, recorded $48.6 million in net inflows, led by BNY Mellon’s ETHA with $22.9 million and additional inflows into Grayscale’s Ethereum product.
But more strikingly, the crypto ETF segment continues to see new developments despite volatile market conditions. Grayscale Investments has confirmed that its Sui Stake DAO ETF will begin trading on the New York Stock Exchange under the ticker GSUI. The product is designed to provide exposure to the Sui ecosystem. It will also generate staking rewards, which have historically ranged between 1.7 percent and 3.3 percent annually.
Meanwhile, Bitwise Asset Management has filed for a new thematic category of ETFs i.e, prediction market ETF that would track contracts tied to the 2028 US presidential election and upcoming congressional midterm elections.
