Wall Street goes wild buying Bitcoin
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Wall Street goes wild buying Bitcoin
Bitcoin's surges and plunges have seemingly never stopped Wall Street financial giants from frantically snapping up the cryptocurrency.
Navigating Web3 tides with focused insightsAuthor: Qin Jin
Whether surging or plunging, Wall Street has never stopped buying Bitcoin.
On January 10, the U.S. Securities and Exchange Commission (SEC) approved 11 Bitcoin ETFs, including one from BlackRock. In the six months leading up to the approval—when signals indicated it was likely—Bitcoin rose from a low near $27,000 to nearly $49,000, an increase of about 162%, outperforming all other crypto assets.
After the approval, Bitcoin experienced two consecutive sharp drops. The first occurred on January 13, when Bitcoin briefly fell below $42,000, with a daily decline exceeding 7%. The second happened in the early hours of January 23, when Bitcoin dropped below $40,000, falling more than 3% in a single day.
Yet, neither the surge nor the plunge has halted the frenzy of Wall Street financial giants scooping up Bitcoin.
According to the latest data from CC15Capital, in the eight trading days following the launch of Bitcoin ETFs starting January 9, ten spot Bitcoin ETF institutions—including BlackRock—have collectively purchased 119,020 Bitcoins, worth approximately $4.7 billion. This figure does not include Grayscale's GBTC, which already holds 523,516 Bitcoins, valued at over $20 billion. Since the SEC approved spot Bitcoin ETFs including BlackRock’s on January 10, Grayscale's GBTC has been in a continuous state of redemptions.
Eric Balchunas, senior ETF analyst at Bloomberg who has tracked Bitcoin ETFs from the beginning, noted that as of January 24, GBTC's outflows amounted to "only" $425 million—the lowest level since the first day of ETF trading—and appear to be trending downward. Still, this remains a substantial sum.
The key is to identify the real issue. Wall Street titans like BlackRock have acquired 119,020 Bitcoins in just eight days. Consider that MicroStrategy, another Wall Street-listed software company, took 300 days to accumulate 100,000 Bitcoins. These financial behemoths have amassed as much—or even more Bitcoin—than MicroStrategy did, using only 1/38th of the time.
It now seems undeniable that Bitcoin’s future belongs to Wall Street. As long as Bitcoin ETFs continue trading on Nasdaq and the New York Stock Exchange, the appetite of financial giants like BlackRock for Bitcoin will never cease.
Among the 119,020 Bitcoins purchased, BlackRock leads by far, holding 44,005 Bitcoins worth approximately $1.765 billion. Carbon Chain Value previously reported on BlackRock’s explosive growth on January 17, when its holdings were around 11,500 Bitcoins. Just seven days later, its holdings surged to 44,005.
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Fidelity Investments follows with 38,149 Bitcoins, worth about $1.53 billion.
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Bitwise holds 11,859 Bitcoins, worth approximately $475 million.
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ARK Invest holds 12,255 Bitcoins, worth about $490 million.
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Invesco Galaxy holds 6,339 Bitcoins, worth around $254 million.
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VanEck holds 2,716 Bitcoins, worth about $100 million.
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Valkyrie holds 2,201 Bitcoins, worth approximately $86.26 million.
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Franklin Templeton holds 1,305 Bitcoins, worth about $52.33 million.
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WisdomTree holds 191 Bitcoins, worth roughly $7.66 million.
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Lastly, Grayscale holds 523,516 Bitcoins, worth approximately $21 billion. Compared to its previous holding of 581,274 Bitcoins, it has sold off nearly 60,000 BTC.
Why is Grayscale selling? As previously explained by Carbon Chain Value, Grayscale’s GBTC was established in 2013. By the time the U.S. Securities and Exchange Commission approved its conversion into an ETF, it had accumulated nearly $30 billion in assets from large institutions and qualified individual investors. However, because GBTC charges a relatively high management fee (1.5%) compared to the other 10 Bitcoin ETF providers, some individual investors have chosen to redeem their shares for cash and invest instead with lower-fee alternatives. This forces Grayscale to sell BTC to meet redemption demands.
Secondly, large institutions such as FTX have directly redeemed and liquidated their holdings, contributing to Grayscale’s BTC sales. According to a prior report by CoinDesk, FTX sold approximately $1 billion worth of Grayscale Bitcoin Trust shares, accounting for much of the fund’s outflows.
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