Hedge funds and asset managers have become the largest force in Bitcoin's over-the-counter market, while small retail wallets are showing accumulation trends near zero, signaling aggressive net selling. Bitcoin ETFs have kept most of their inflows despite the price drop, and Bitwise's chief investment officer says that conviction explains why institutions aren't flinching.
Hedge funds and asset managers now execute 72% of Bitcoin's spot trading volume on Wintermute's OTC desk, up from 61% in prior periods. Retail wallets, which bought past downturns, are the ones leading the current sell-off.
The great role reversal
On-chain data from Glassnode shows retail wallets holding under 10 BTC posted Accumulation Trend Scores of 0.11 and 0.05 as of March 2026. A score near zero means net selling, while a score near one means net accumulation, so retail holders are close to the selling extreme.
Bitcoin's price has dropped approximately 50% from its highs, sliding below $67,000. Even so, cumulative net outflows from Bitcoin ETFs stayed under $10 billion as of March 2026. That's against roughly $60 billion in net inflows since the funds launched in January 2024 through October 2025.
Why institutions aren't flinching
According to Bitwise chief investment officer Matt Hougan, who spoke on March 16, 2026, institutional investors are showing what he called "diamond hands" through the downturn. He tied that conviction to Bitcoin's status as a non-consensus asset.
That conviction comes from how the money gets allocated. A hedge fund's decision to buy Bitcoin typically clears investment committees and risk frameworks first, producing positioning that doesn't unwind just because the price fell 20% in a month.
What this means for the market
JPMorgan expects crypto inflows in 2026 to shift toward institutional investors. That forecast follows roughly $130 billion in primarily retail-led flows through Bitcoin and Ether ETFs in 2025.
The $10 billion in cumulative ETF outflows is the figure to watch. If it accelerates, it would signal that even high-conviction institutional holders are reassessing their thesis. Relative to the $60 billion that has flowed in, the bear market so far hasn't shaken that structural bid.
Source: Crypto Briefing
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