In the wake of Bitcoin’s meteoric rise to new all-time highs following the crypto-bullish outcome of the US presidential election, a trend is emerging among Wall Street’s elite financial institutions. The wealth management arms of banking giants like Goldman Sachs, Morgan Stanley, and Bank of America are reporting modest inflows into Bitcoin exchange-traded funds (ETFs) on behalf of their well-heeled clients.
According to the latest batch of 13F filings, required quarterly from institutional investment managers with over $100 million in assets, many of the household names in banking continued to dip their toes deeper into the world of Bitcoin ETFs in Q3. While the positions remain relatively small, experts say, the stage may be set for an explosion in Bitcoin FOMO as prices breach $90,000 and a new crypto-savvy administration prepares to take the reins in Washington.
Banks’ Bitcoin Buys Reflect Price Action
A review of the 13F filings shows that Goldman Sachs reported holding $710 million worth of shares in Bitcoin ETFs in the quarter ending Sept. 30, nearly doubling its clients’ holdings in the funds from $418 million in the prior quarter. The lion’s share of the bank’s holdings were in BlackRock’s iShares Bitcoin Trust (IBIT), in which it held just shy of 13 million shares.
Other top banks and wealth managers, including Morgan Stanley, Cantor Fitzgerald, Royal Bank of Canada, Bank of America, UBS, and HSBC, kept their positions largely unchanged, neither significantly increasing nor decreasing their stakes. A newcomer to the Bitcoin ETF scene was Australian investment bank Macquarie Group, which scooped up 132,355 shares of IBIT at a value of $4.8 million. Wells Fargo, with a very minor stake in the ETFs, held most of its shares in the Grayscale Bitcoin Trust (GBTC) and Grayscale Bitcoin Mini Trust (BTC).
The tepid action among institutions largely reflects the price movement of Bitcoin itself over the three-month period from the beginning of July through the end of September. Prices mostly ranged between $53,000 and $66,000, marking a period of stagnation or even decline after a similar stretch of uninspired trading through much of Q2.
Election Ignites Explosive Q4 Rally
Of course, the landscape has shifted dramatically in Q4, both in the run-up to and aftermath of the election of Donald Trump, an outspoken crypto advocate, to the US presidency. Bitcoin rapidly smashed through its months-long trading range, quickly surpassing the March record high of $73,700 and pushing on this week to $93,400.
The recent price action, combined with the anticipated embrace of crypto by the incoming Trump administration, could inspire a healthy dose of FOMO among institutional players and their clients, analysts say. It’s at least somewhat possible that the next batch of 13F filings, which will land after the start of 2025, could prove far more interesting than the sleepy set from this quarter.
“I expect a lot of behind-the-scenes work to ensure institutions have at minimum a 1% allocation due to the crypto-friendly President Donald Trump and Bitcoin’s breakout,” said James Van Straten, senior analyst at CoinDesk.
Institutions Playing Catch-Up
Van Straten noted that the 13F filings reflect the tepid Bitcoin price action of Q3, as most institutions are slow to deploy capital and wait to observe trends rather than front-run a historically bullish Q4. He expects that dynamic to change dramatically given the convergence of Bitcoin’s surge and the shifting regulatory landscape in Washington.
With Bitcoin seemingly poised for a push toward $100,000 and beyond, and the Trump administration likely to ease the path for further institutional adoption, analysts and industry insiders are bracing for a tidal wave of new big-money investment to pour into the asset class as legacy financial players race to establish positions and avoid being left behind in the next major crypto bull run.
“Wall Street is reading the tea leaves, seeing a perfect storm brewing for an institutional FOMO fest into year end,” said one crypto hedge fund manager who requested anonymity to discuss client positioning. “Once Bitcoin cracks six figures, it’s going to trigger a scramble to gain exposure like nothing we’ve ever seen.”
Given the prospect of such a momentous shift on the horizon, the relative calm reflected in the Q3 filings could mark the quiet before the storm as banks and their big-fish clients brace for a Bitcoin breakout that many see as inevitable. While only time will tell how the trends play out, one thing seems certain: All eyes in the financial world will be glued to the Bitcoin charts in the coming weeks and months, with many poised to pounce at the first sign that the institutional herd is truly ready to thunder into the market.
