As Bitcoin’s price soars to new heights in the wake of the U.S. presidential election, are the wealthy clients of Wall Street’s biggest banks about to take the crypto plunge? That’s the tantalizing question raised by the latest batch of regulatory filings, which show a modest uptick in institutional investments in Bitcoin exchange-traded funds (ETFs) during the third quarter. But with BTC now trading near $93,000 amid expectations of a crypto-friendly Biden administration, many believe the fourth quarter could bring a tidal wave of “fear of missing out” (FOMO) among deep-pocketed investors.
Banks’ Bitcoin Bets Inch Higher
The latest 13F reports, which institutional investors managing over $100 million must file quarterly, reveal that clients of Goldman Sachs, Morgan Stanley, Bank of America and others continued to cautiously buy into Bitcoin via ETFs in Q3. Goldman reported holding $710 million worth of spot Bitcoin ETF shares as of September 30, nearly doubling its clients’ allocations from the previous quarter. Most of the bank’s holdings were in BlackRock’s iShares Bitcoin Trust (IBIT).
Other top-tier banks, including Morgan Stanley, Cantor Fitzgerald, RBC, BofA, UBS and HSBC, neither added nor subtracted significantly from their positions. A new entrant was Australian investment bank Macquarie Group, which bought $4.8 million worth of IBIT shares. Wells Fargo, with a very small stake in the ETFs, held most of its shares in the Grayscale Bitcoin Trust (GBTC) and Bitcoin Mini Trust (BTC).
Calm Before the Storm?
The July-September period saw mostly flat to downward price action for Bitcoin, largely ranging from $53,000 to $66,000. This followed a volatile Q2, so the lukewarm institutional interest possibly reflected the relative calm that descended on the market.
But things have certainly changed in a big way in Q4 amid the run-up to and aftermath of Donald Trump’s election to the U.S. presidency. Bitcoin has exploded out of its multi-month range, quickly taking out the March record of $73,700 and pushing this week to as high as $93,400.
“I expect a lot of jockeying behind the scenes to ensure institutions have at minimum a 1% allocation because of crypto-friendly president Trump and the melt-up in Bitcoin.”
– James Van Straten, CoinDesk Senior Analyst
The recent price action, combined with an anticipated embrace of crypto by the incoming Trump administration, could inspire plenty of FOMO among institutional players and their clients. It’s at least somewhat likely that the next batch of 13Fs coming after the start of 2025 could prove more interesting than this quarter’s.
Regulations Remain Key
Of course, much will depend on the regulatory environment. While Trump has signaled support for crypto, many crucial appointments and policy decisions are still to come. According to industry insiders, key areas to watch will be:
- Approval of a spot Bitcoin ETF by the SEC
- Clarity on how digital assets will be classified and regulated
- Any move toward a U.S. central bank digital currency (CBDC)
- Global coordination on crypto rules to avoid regulatory arbitrage
Progress on these fronts could open the floodgates for institutional crypto adoption. But a hostile or muddled regulatory picture could keep many big players on the sidelines, even as Bitcoin’s price continues to climb.
The Future Is Here
Regardless of how Q4 plays out, it’s becoming increasingly clear that Bitcoin and digital assets are now firmly on the radar of institutional investors. From Wall Street banks to university endowments to corporate treasuries, mainstream adoption is well underway.
As more investors come to understand Bitcoin’s value proposition as an inflation hedge, uncorrelated asset, and asymmetric bet on the future of money and technology, the inflows are likely to accelerate. At over $98,000 per coin as of this writing, BTC’s total market cap is nearing $2 trillion – and some bulls see Bitcoin reaching as high as $1 million in the coming years.
Whether those lofty predictions come to pass, this much is clear: Bitcoin has graduated from shadowy experiment to serious contender in the minds of investors. And as Q3’s 13F filings suggest, even the largest and most conservative institutions are starting to take notice. Buckle up – we may be in for quite a ride in the months ahead.
Other top-tier banks, including Morgan Stanley, Cantor Fitzgerald, RBC, BofA, UBS and HSBC, neither added nor subtracted significantly from their positions. A new entrant was Australian investment bank Macquarie Group, which bought $4.8 million worth of IBIT shares. Wells Fargo, with a very small stake in the ETFs, held most of its shares in the Grayscale Bitcoin Trust (GBTC) and Bitcoin Mini Trust (BTC).
Calm Before the Storm?
The July-September period saw mostly flat to downward price action for Bitcoin, largely ranging from $53,000 to $66,000. This followed a volatile Q2, so the lukewarm institutional interest possibly reflected the relative calm that descended on the market.
But things have certainly changed in a big way in Q4 amid the run-up to and aftermath of Donald Trump’s election to the U.S. presidency. Bitcoin has exploded out of its multi-month range, quickly taking out the March record of $73,700 and pushing this week to as high as $93,400.
“I expect a lot of jockeying behind the scenes to ensure institutions have at minimum a 1% allocation because of crypto-friendly president Trump and the melt-up in Bitcoin.”
– James Van Straten, CoinDesk Senior Analyst
The recent price action, combined with an anticipated embrace of crypto by the incoming Trump administration, could inspire plenty of FOMO among institutional players and their clients. It’s at least somewhat likely that the next batch of 13Fs coming after the start of 2025 could prove more interesting than this quarter’s.
Regulations Remain Key
Of course, much will depend on the regulatory environment. While Trump has signaled support for crypto, many crucial appointments and policy decisions are still to come. According to industry insiders, key areas to watch will be:
- Approval of a spot Bitcoin ETF by the SEC
- Clarity on how digital assets will be classified and regulated
- Any move toward a U.S. central bank digital currency (CBDC)
- Global coordination on crypto rules to avoid regulatory arbitrage
Progress on these fronts could open the floodgates for institutional crypto adoption. But a hostile or muddled regulatory picture could keep many big players on the sidelines, even as Bitcoin’s price continues to climb.
The Future Is Here
Regardless of how Q4 plays out, it’s becoming increasingly clear that Bitcoin and digital assets are now firmly on the radar of institutional investors. From Wall Street banks to university endowments to corporate treasuries, mainstream adoption is well underway.
As more investors come to understand Bitcoin’s value proposition as an inflation hedge, uncorrelated asset, and asymmetric bet on the future of money and technology, the inflows are likely to accelerate. At over $98,000 per coin as of this writing, BTC’s total market cap is nearing $2 trillion – and some bulls see Bitcoin reaching as high as $1 million in the coming years.
Whether those lofty predictions come to pass, this much is clear: Bitcoin has graduated from shadowy experiment to serious contender in the minds of investors. And as Q3’s 13F filings suggest, even the largest and most conservative institutions are starting to take notice. Buckle up – we may be in for quite a ride in the months ahead.
