As the crypto world celebrated Bitcoin’s meteoric rise to new all-time highs in the wake of the US presidential election, Wall Street banks quietly continued accumulating spot Bitcoin ETFs on behalf of their wealth management clients. While the latest batch of 13F filings from institutional investors revealed no earth-shattering events, mirroring Bitcoin’s unremarkable price action in Q3, the stage may be set for a resurgence of interest in the final quarter of 2024.
According to the filings, banking giants Goldman Sachs, Morgan Stanley, and Bank of America persisted in modestly buying shares of spot Bitcoin exchange-traded funds for their clients. Goldman reported owning $710 million worth of Bitcoin ETF shares in the quarter ending September 30, nearly doubling client investments from $418 million in the previous quarter. The majority of the bank’s holdings were in BlackRock’s iShares Bitcoin Trust (IBIT), in which it owned just under 13 million shares.
Institutions Poised to Pounce?
While most leading banks and asset managers, including Morgan Stanley, Cantor Fitzgerald, Royal Bank of Canada, Bank of America, UBS, and HSBC, neither added nor subtracted significantly from their positions, the lackluster activity likely reflected the sluggish price dynamics that prevailed in the Bitcoin market during Q3. As CoinDesk senior analyst James Van Straten noted:
“The 13F filings mirror Bitcoin’s lethargic price action in the third quarter. Most institutions are slowly funneling capital and following trends, and few took the initiative to front-run the historically bullish fourth quarter.”
James Van Straten, CoinDesk Senior Analyst
However, the fourth quarter has already brought a sea change, with Bitcoin breaking out of its months-long range to swiftly topple the March record of $73,700 and surge to $93,400 this week. The recent price action, coupled with the anticipated crypto-friendly stance of the incoming Trump administration, could spark a considerable bout of “fear of missing out” (FOMO) among institutional players and their clients.
New Entrants and Expanded Offerings
The filings also revealed a new entrant in Australian investment bank Macquarie Group, which acquired 132,355 shares of IBIT worth $4.8 million. Meanwhile, Wells Fargo, holding a very minor stake in ETFs, kept most of its shares in Grayscale Bitcoin Trust (GBTC) and Grayscale Bitcoin Mini Trust (BTC).
BlackRock disclosed a stake of 2.54 million shares worth $91.6 million as of September 30 in its own fund, showcasing the asset manager’s growing commitment to offering Bitcoin exposure to its massive client base.
The Trump Effect
With the crypto-friendly Donald Trump set to assume the presidency in January, many expect a surge in institutional adoption and regulatory clarity for the nascent asset class. As Van Straten suggested, the next batch of 13F filings, due out in early 2025, could prove far more eventful:
“I expect a lot of jockeying behind the scenes to ensure institutions get at least a 1% allocation due to crypto-friendly President Donald Trump and the Bitcoin crash.”
James Van Straten, CoinDesk Senior Analyst
As Bitcoin continues to cement its status as a legitimate asset class and an attractive portfolio diversifier, the floodgates of institutional capital may be poised to open wider than ever before. While Q3 saw banks merely dipping their toes, the coming months could witness a full-blown plunge as FOMO takes hold on Wall Street.
