The cryptocurrency world is abuzz with excitement as Bitcoin (BTC) smashes through record highs, but are the big banks and their wealthy clients about to join the party? Recent filings suggest that while Wall Street titans are dipping their toes in the water, the real tidal wave of institutional money may be yet to come.
Wall Street Banks Quietly Accumulating Bitcoin ETFs
According to recently released 13F forms, which disclose institutional holdings, major players like Goldman Sachs, Morgan Stanley, and Bank of America continued to modestly purchase shares of spot Bitcoin ETFs on behalf of their wealth management clients in Q3. However, the positions remained relatively unchanged, likely reflecting Bitcoin’s rangebound price action during the July to September period.
Goldman reported holding $710 million worth of spot Bitcoin ETF shares as of September 30th, with client allocations nearly doubling from $418 million in the prior quarter. The lion’s share of the bank’s holdings were in BlackRock’s iShares Bitcoin Trust (IBIT), of which it owned 13 million shares.
Other Banks Maintain Positions
Fellow heavyweights Morgan Stanley, Cantor Fitzgerald, Royal Bank of Canada, Bank of America, UBS and HSBC largely neither added to nor subtracted from their positions. A new entrant was Australian investment bank Macquarie Group, which purchased 132,355 IBIT shares worth $4.8 million.
Despite the overall tepid activity, one revelation stood out – BlackRock disclosed ownership of 2.54 million shares worth $91.6 million of its own fund as of September 30th. The asset management giant’s backing of its own product may signal rising conviction in Bitcoin’s institutional appeal.
The Calm Before the Storm?
While the third quarter was characterized by stable to downward price action, with Bitcoin mostly ranging between $53,000 to $66,000, the fourth quarter has already brought a dramatic change in fortune. The world’s largest cryptocurrency rocketed out of its multi-month range to swiftly surpass March’s record high of $73,700 and continued climbing this week to $93,400.
The recent price surge, coupled with the anticipated crypto-friendly stance of the incoming Trump administration, could spark significant “fear of missing out” (FOMO) among institutional players and their clients. It’s possible that the next batch of 13Fs, which will emerge after the start of 2025, could prove far more eventful than this quarter’s showing.
“I expect a lot of activity behind the scenes to ensure institutions have at bare minimum a 1% allocation given the crypto-friendly President Donald Trump and the Bitcoin halving,” said James Van Straten, senior analyst at CoinDesk.
With Bitcoin’s quadrennial halving event looming in early 2025, slashing new supply in half, many are betting that increasing institutional participation will help propel the cryptocurrency to dizzying new highs. If the trickle of Q3 inflows turns into a Q4 flood, those bets may just pay off sooner than most expect.
