After the launch of 11 spot Bitcoin (BTC) ETFs in January, the investment vehicle has seen considerable inflows in the last seven months. The ETF launch propelled BTC to a new all-time high of $73,737 in March. The ETF launch has also led to financial giants, such as Goldman Sachs, opening their doors to the original crypto.
According to its quarterly 13F filing, Goldman Sachs had $418.65 of spot BTC ETF shares. BlackRock’s iShares Bitcoin Trust makes up most of the bank’s BTC ETF holdings, amounting to about 6.9 million shares worth around $238.6 million.
Breakdown of Holdings
- FBTC: 1.51 million shares worth around $79.5 million
- Invesco Galaxy Bitcoin: $56.1 million worth
- Grayscale’s Converted BTC Fund: 660,183 shares worth nearly $35 million
- Other Holdings: Shares of Bitwise, WisdomTree, and ARK 21Shares’ BTC ETFs
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Why are banks opening their doors to crypto?
Increase in Client Demands
One reason financial institutions are stacking up their digital asset coffers could be an increase in client demand. The cryptocurrency industry has seen a meteoric rise over the last decade.
BTC’s Performance
BTC is one of the best-performing assets of the previous 15 years, if not the best. Many analysts anticipate the sector’s continued growth over the next decade. Some also predict BTC will eventually hit the $1 million mark.
Risk Reduction
Holding ETFs also means that the institutions don’t have to keep the actual underlying asset, vastly reducing their risk.
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Bitcoin ETFs have opened the doors for financial giants to dip their toes in the digital asset arena while undertaking minimum risks. In the future, we may see more institutions buying crypto ETFs.