Professional ownership of US spot Bitcoin exchange-traded funds (ETFs) declined sharply in the first quarter as Bitcoin’s bear market deepened, suggesting that trading-oriented institutions were a significant source of selling pressure during the downturn.

A new report by CoinShares analyzing quarterly 13F filings — regulatory disclosures that reveal the equity holdings of investment managers with at least $100 million in assets — found that professional investors reduced their Bitcoin ETF exposure to 261,000 BTC from 313,000 BTC in the first quarter, a 17% decline.

The combined value of those holdings fell 35% to $17.8 billion, while the share of total US Bitcoin ETF assets held by 13F filers declined to 20.8% from 24.7%.

“This dataset is consistent with what bitcoin markets have historically looked like in drawdowns,” CoinShares digital asset analyst Matt Kimmell wrote in the report. “Leveraged and tactical strategies unwind.”

The selling was heavily concentrated among hedge funds and brokerages, which accounted for roughly 96% of the reduction in exposure. Hedge funds cut their holdings by 31,400 BTC, or 39%, while brokerages reduced exposure by 18,800 BTC, a 53% decline.

In contrast, investment advisors — the largest professional cohort with 150,300 BTC in holdings — reduced exposure by just 5.9%. Banks more than doubled their Bitcoin ETF holdings, adding 7,800 BTC during the quarter.

The decline in professional ownership coincided with a sharp correction in Bitcoin’s price. The asset’s value fell 22% during Q1, extending declines from late 2025 and briefly dropping below $60,000. At its lowest point, Bitcoin was down roughly 50% from its October 2025 all-time high above $126,000.

The share of Bitcoin ETF holdings by professional managers declined in the first quarter. Source: CoinShares

Related: Strategy debt, AI boom, Bitcoin collapse have analysts predicting doom: Are they right?

Despite BTC market volatility, regulatory backdrop improves

Despite the market volatility, CoinShares said the first quarter delivered several regulatory developments that could support the digital asset industry’s long-term growth.

Among them were efforts by US regulators to provide greater clarity around the division of oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), as well as proposals affecting how digital assets may be treated in retirement accounts.

Regulatory progress has continued beyond Q1, with the SEC recently making digital assets a strategic priority through 2030. In a draft document released this week, the agency vowed to “provide a firm regulatory foundation for digital assets and distributed ledger technologies through a rational, coherent, and principled approach.”

SEC Chair Paul Atkins’ message in the agency’s draft Strategic Plan through 2030. Source: SEC

CoinShares also highlighted the growing acceptance of Bitcoin among traditional financial institutions. Earlier this year, BlackRock acknowledged Bitcoin’s potential role in modern portfolios, arguing that the traditional stock-and-bond diversification model has become less reliable in the post-2020 investment environment.

Nevertheless, market participants remain focused on the fate of the CLARITY Act, a proposed market structure bill that would establish a more comprehensive regulatory framework for digital assets and further define the roles of the SEC and CFTC. 

The current version of the bill has drawn scrutiny from the banking industry, though some lawmakers expect it could reach the Senate floor for a vote as early as August.

Related: Crypto Biz: Crypto infrastructure spending rises as ETF appetite cools

Regulatory scrutiny of crypto licensing intensified as lawmakers scrutinized the handling of a national bank trust charter application tied to World Liberty Financial, a Trump-family affiliated crypto venture. During a House Financial Services Committee hearing on the oversight of prudential regulators, OCC Comptroller Jonathan Gould—nominated by Donald Trump—faced questions about potential conflicts of interest and the potential influence of political considerations on licensing decisions. The hearing underscored ongoing debates over how closely regulatory actions should align with political and familial ties in the context of the evolving U.S. crypto framework.

Representative Gregory Meeks of New York pressed Gould on World Liberty’s connections to foreign governments and to the Binance exchange, arguing that the company’s co-founders include members of the president’s family. World Liberty Financial had submitted an OCC charter application in January, prompting significant Democratic pushback over perceived conflicts of interest. At issue was whether the OCC would apply the same standards to World Liberty as it does to other applicants seeking a national trust charter, which affects the regulatory treatment of certain crypto-services providers.

Meeks asserted that World Liberty’s actions “actively line the pockets of the president’s family,” urging the OCC to demonstrate that its decision would be in the public interest and not influenced by political considerations. Gould and Meeks spoke past one another at times, with the lawmaker urging that the OCC head be held to prove he was acting on behalf of the American people rather than serving as a political intermediary for the Trump family. Gould responded that political pressure had been the only pressure he perceived from lawmakers outside the Senate.

Even before this hearing, the OCC had already approved or conditionally approved several national trust charter applications from crypto companies, signaling a growing regulatory pathway for the sector. Names cited included Coinbase, Ripple, BitGo, Circle, Fidelity Digital Assets and Paxos. The OCC’s openness to national trust charters has been framed as a way to provide regulated access to stable operations and banking-like services for crypto firms, albeit amid intense regulatory and policy scrutiny. Gould began his tenure in July 2025, having been confirmed by the Republican-dominated Senate along party lines. In January, shortly after World Liberty’s application was submitted, Gould stated the agency would be “apolitical and nonpartisan” in its review process. Massachusetts Senator Elizabeth Warren, who had also urged pausing the review, argued that the approvals appeared to be directed at “seemingly ineligible companies,” potentially contravening federal banking laws.

World Liberty’s case sits within a broader trend of tightly watched efforts to integrate crypto firms into traditional banking-style oversight through national trust charters. In parallel, crypto exchange Kraken’s parent company, Payward, filed a similar application with the OCC in May, highlighting the ongoing push among several market participants to obtain the same regulatory treatment as established banks for certain crypto activities.

Key takeaways

• OCC Comptroller Jonathan Gould asserted that there was no presidential instruction directing or pressuring him to approve or favor World Liberty Financial’s national trust charter application.
• The House Financial Services Committee hearing spotlighted perceived conflicts of interest linked to World Liberty’s Trump-family ties, with lawmakers urging equal regulatory scrutiny for the charter application.
• The OCC has previously approved or conditionally approved a slate of national trust charter applications from major crypto firms, including Coinbase, Ripple, BitGo, Circle, Fidelity Digital Assets, and Paxos; Kraken’s Payward also pursued similar oversight.
• Regulatory debate centers on whether national trust charters create a lighter or different set of banking requirements for crypto firms, and how those standards align with federal banking laws and AML/KYC expectations.
• The broader policy environment remains contested, with calls for enhanced anti-corruption provisions and tighter enforcement, as conservative and progressive lawmakers weigh the costs and benefits of expanded crypto bank-charter access.
• Two key committees advanced the CLARITY Act in the Senate, signaling movement toward a comprehensive digital-asset market-structure framework, with timelines discussed for passage in the coming months; observers note the importance of aligning U.S. policy with global standards.

Regulatory neutrality, charters, and the path forward

The hearing showcased how the OCC’s decisions on chartering crypto firms sit at the intersection of regulatory design, political accountability, and market integrity. The concept of a national trust charter—allowing crypto firms to offer certain services with banking-like protections—continues to be debated for its practical implications, including licensing standards, consumer protection, and systemic risk considerations. Critics warn of potential conflicts of interest when a governing official has personal or familial ties to an applicant, while proponents emphasize the need for clear, consistent regulatory frameworks that enable compliance-oriented firms to operate with adequate oversight.

From a compliance and enforcement perspective, the case underscores several critical issues for crypto firms and financial institutions alike. First, licensing pathways such as national trust charters shape the regulatory runway for crypto-service providers, with implications for AML/KYC requirements, consumer disclosures, and supervisory regimes. Second, the treatment of politically connected entities raises governance questions about independence, transparency, and the risk of regulatory capture. Finally, the ongoing movement toward a formalized digital asset market structure—exemplified by the CLARITY Act process—could redefine the boundary between crypto activities and traditional banking, influencing licensing, custody, settlement, and cross-border operations.

According to Cointelegraph, the CLARITY Act’s consolidation in the Senate represents a deliberate step toward a unified framework for digital assets, which could affect how banks, exchanges, and crypto firms navigate licensing, custody, and interoperability requirements. The administration’s stated aim for summer passage, as cited in reporting, signals a potential shift in legislative momentum and regulatory tempo, with significant implications for compliance programs and cross-border activities. As the regulatory landscape evolves, institutions must monitor not only domestic policy developments but also how international standards—such as MiCA and U.S. enforcement actions—intersect to shape risk, governance, and operational resilience.

Looking ahead, the central issue remains how regulators will balance innovation with risk management and consumer protection, while ensuring transparent governance and consistent application of standards across entrants to the charter framework. The coming months will be pivotal for determining whether the United States can sustain a robust, enforceable regulatory regime that accommodates crypto-native business models without compromising integrity or market stability.

Closing perspective: ongoing congressional scrutiny, evolving licensing standards, and the CLARITY Act’s trajectory will define the U.S. regulatory posture for crypto firms and their access to traditional banking rails. Stakeholders should watch how enforcement priorities and governance practices adapt to these developments, as policy choices will reverberate through licensing decisions, cross-border operations, and institutional compliance programs.

Political activist Bill Browder, the teenager’s father, said his son was “the first high school student in the world to be sanctioned by an authoritarian regime” over a report on the ruble-pegged stablecoin A7A5.

Alexander Browder, the son of American-British political activist Bill Browder, said that he has been targeted by Russia over allegations that officials used the ruble-pegged A7A5 stablecoin to evade sanctions amid the country’s war on Ukraine.

In a Wednesday X post, Browder said his work through the website Global Cryptocurrency Laundering Database had resulted in him being “sanctioned by an authoritarian regime for uncovering corruption.” Specifically, he alleged in a March report that A7A5 was backed by deposits from Russian financial institution Promsvyazban and was used to circumvent Western sanctions stemming from Russia’s war on Ukraine.

“The Ruble-backed stablecoin A7A5 is one of the most prevalent issues facing the West. It is sanctioned in the UK, US and EU but it still operates,” said Browder. “A7A5 holds value through its ability to be converted into cash by criminals. Western governments need to put pressure on the specific exchanges which allow the conversions to happen and the countries which facilitate these exchanges.”

Source: Bill Browder

The stablecoin pegged to the ruble processed more than $110 billion in onchain transactions, according to a CertiK report this week. European Union officials sanctioned A7A5 in October 2025, saying the stablecoin was intended to bypass war-related financial restrictions on Russia’s economy.

Related: HTX denies UK sanctions allegations as new data flags $7.6B Russia-linked flows

Browder says his actions “touched a raw nerve” with Russia’s government. According to British news outlet The Times, he may be the youngest person to ever be sanctioned by Russia. The government has also banned certain journalists from entering the country.

His father is known for exposing corruption in Russia and leading the Global Magnitsky Justice Campaign.

Russian lawmakers weigh legislation to impose criminal penalties for unlicensed crypto activities

In April, lawmakers in Russia’s parliament advanced a bill that could allow authorities to impose criminal penalties on unlicensed digital asset services and mandate registration with the country’s central bank. The proposed bill, “On Digital Currency and Digital Rights,” if passed, could ban unlicensed crypto platforms starting in July 2027.

Magazine: Bitcoin miners are pivoting to AI, so why is the hashrate near ATHs?

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

Key Highlights

• Broadcom (AVGO) shares declined despite surpassing earnings estimates, failing to meet Wall Street’s lofty projections
• Marvell Technology (MRVL) experienced a pullback as investors secured gains after a significant recent surge
• CrowdStrike (CRWD) delivered strong results and unveiled a stock split, yet fell due to stretched valuations
• Ciena (CIEN) shares tumbled despite increasing revenue projections, with margin concerns weighing on sentiment
• Crude oil prices breached $95 per barrel, lifting energy names while stoking inflation worries

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Broadcom delivered solid quarterly results fueled by robust artificial intelligence demand, yet the market reaction was decidedly negative. The semiconductor giant’s networking solutions and specialized AI processors have positioned it as a critical partner to leading cloud infrastructure companies. However, Wall Street had already baked in exceptional performance, and when actual figures fell slightly below those sky-high expectations, shares tumbled.

The weakness rapidly contaminated the broader chip industry. Semiconductor names such as Advanced Micro Devices, Micron, Qualcomm, and Intel all retreated as market participants shifted capital away from recent high-flyers.

Marvell Faces Profit-Taking After Trillion-Dollar Valuation Buzz

Marvell Technology had experienced an impressive rally following remarks from Nvidia CEO Jensen Huang, who indicated the company possessed potential to eventually achieve a trillion-dollar market capitalization. Those comments propelled the stock significantly higher throughout recent trading sessions. However, today’s broader sector weakness provided an ideal moment for traders to realize profits.

The Marvell decline underscored a crucial reality about AI-focused equities: rapid ascents can be matched by equally swift reversals. Elevated price-to-earnings multiples leave minimal margin for error, even when fundamental business narratives remain compelling.

CrowdStrike Posts Strong Quarter Yet Shares Retreat

CrowdStrike reported quarterly earnings that exceeded analyst projections and increased its outlook for the full fiscal year. The cybersecurity leader simultaneously announced a four-for-one stock split, a move generally designed to attract retail participation by making shares more accessible at a lower price point.

Yet despite these positive developments, the stock declined. Market participants appeared more concerned with the company’s premium valuation multiple rather than celebrating the operational achievements. This represented another illustration of a recurring market theme—exceptional results aren’t always sufficient to sustain momentum.

Ciena emerged as another unexpected casualty. The networking equipment provider increased its top-line revenue forecast but fell short on profitability metrics and certain forward-looking guidance components. Shares plunged sharply, demonstrating how demanding investors have grown regarding quarterly performance, requiring flawless execution across all metrics.

UnitedHealth provided one of the session’s few positive storylines. Bank of America elevated its rating on the healthcare behemoth, pushing shares higher and providing support to the broader medical sector. Market participants have been searching for defensive positioning beyond technology, and healthcare offers that characteristic profile.

Oil prices surged past the $95 per barrel threshold amid escalating geopolitical tensions across the Middle East. Energy sector equities benefited from the commodity strength, though the advance simultaneously reignited concerns regarding inflationary pressures. Elevated crude prices could complicate the Federal Reserve’s efforts to maintain price stability.

The session’s overall character reflected an increasingly discriminating market environment. While artificial intelligence remains an attractive secular growth theme, investors have grown far more selective regarding valuations and are no longer willing to chase momentum at any price.

Quick Summary

• The Dow Jones Industrial Average surged more than 500 points (approximately 1%) on Thursday, June 4, even as the S&P 500 and Nasdaq Composite declined
• Broadcom (AVGO) plummeted over 14% following disappointing guidance for its AI chip business that failed to meet Wall Street’s elevated expectations
• The iShares Semiconductor ETF tumbled 4.4%, weighing heavily on technology shares
• The House voted to terminate military operations with Iran, signaling de-escalation after tensions flared earlier this week
• SpaceX disclosed a planned $75 billion initial public offering in regulatory documents

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U.S. equity markets experienced a dramatic divergence on Thursday, with traditional industrial companies surging while technology stocks suffered significant losses.

The Dow Jones Industrial Average jumped over 500 points, registering approximately 1% gains. Meanwhile, the S&P 500 declined between 0.2% and 0.3%, while the Nasdaq Composite dropped more than 1%.

The divergence was particularly striking. Despite the mixed index performance, most individual stocks within the Dow and S&P 500 actually advanced. However, steep declines among semiconductor names created sufficient downward pressure to offset broader market strength.

Broadcom’s Forecast Disappointment Sparks Chip Stock Rout

Broadcom stock collapsed more than 14% on Thursday following the semiconductor giant’s artificial intelligence chip revenue outlook, which disappointed investors looking for more aggressive growth projections.

While Broadcom’s quarterly results exceeded analyst estimates, the company’s forward guidance failed to justify the stock’s dramatic appreciation over the preceding twelve months. Investors who had bid shares higher on AI optimism quickly reversed course.

“All it takes is one company to at least temporarily wreck the party,” noted Paul Hickey, co-founder of Bespoke Investment Group. “Yesterday, the party pooper was Broadcom.”

The iShares Semiconductor ETF plunged 4.4% during Thursday’s session. Additional chip manufacturers including Micron and Sandisk also posted notable declines.

Nvidia, which represents the Dow’s sole semiconductor holding, demonstrated relative resilience with just a 0.3% decline.

The technology-focused Nasdaq had posted consecutive daily gains for approximately two weeks before Thursday’s reversal. Market strategists had cautioned that the rally’s foundation was weakening, with fewer stocks contributing to index advances — a trend that historically signals vulnerability.

Geopolitical Developments, Employment Data, and SpaceX Filing Draw Attention

Investors also processed significant geopolitical news. The House of Representatives passed legislation on Wednesday to conclude U.S. military engagement with Iran. The congressional action followed a concerning escalation in hostilities earlier this week — the most serious confrontation since an April ceasefire agreement.

Oil prices retreated on Thursday as President Trump outlined potential ceasefire parameters. The U.S. dollar and Treasury yields similarly moderated.

With Friday’s May employment report approaching, market participants analyzed two Thursday labor indicators: the Bureau of Labor Statistics’ weekly unemployment claims and layoff tracking from Challenger, Gray & Christmas. Holiday-week distortions contributed to elevated jobless claims figures.

Separately, SpaceX revealed through Securities and Exchange Commission filings its intention to pursue a $75 billion initial public offering — positioning it among the largest public market debuts in history.

Corporate earnings releases continued with anticipated reports from Ciena Corporation, Lululemon Athletica, and DocuSign scheduled for Thursday.

Earlier this week, Alphabet’s equity capital raise bolstered expectations for sustained artificial intelligence infrastructure investment. However, following an extended technology sector rally, Broadcom’s results proved sufficient to undermine investor confidence.

The S&P 500 and Nasdaq were tracking toward consecutive sessions of declines as afternoon trading progressed.