Bank of New York Mellon disclosed at the end of fourth-quarter holdings of over $13 million of Bitcoin ETFs, another sign of traditional institutions’ increasing exposure to digital assets.
According to a newly filed disclosure with the SEC, BNY Mellon owns 115,108 shares of WisdomTree Bitcoin Fund (BTCW), valued at approximately $11.87 million, and 25,309 shares of BlackRock’s iShares Bitcoin Trust (IBIT), worth about $1.4 million.
Wall Street warming up to Bitcoin
BNY Mellon’s position in Bitcoin ETFs adds to a growing trend among major Wall Street banks cautiously entering the digital asset space.
JPMorgan Chase for example, has nearly $1,000,000 in Bitcoin ETFs while Goldman Sachs had over $2 Billion in Bitcoin ETFs and Ethereum ETFs as of the end the the fourth quarter.
SEC has approved Bitcoin spot ETFs for early 2024. They allow institutional and retail investors exposure to Bitcoin, without holding the actual asset. This move is widely seen as an important moment in the adoption of cryptos by traditional finance.
Even though the major banks are increasingly investing in ETFs, they still cannot directly hold or trade cryptocurrencies.
Goldman Sachs CEO David Solomon reaffirmed in December the regulatory barriers that limit banks’ direct ownership of crypto. Solomon explained that, while his firm offers advisory services for digital assets, they are not permitted to own Bitcoin directly.
The shift in regulatory position
The new US administration is starting to shift the regulatory stance in spite of the existing limitations. Federal Reserve Chair Jerome Powell reaffirmed recently that the Fed won’t block banks offering crypto-services, as long they manage risks.
In his speech to Congress, he said that many banks regulated by the Fed already participate in crypto. However, he warned of excessive exposure. He did not mention that banks could invest and hold Bitcoins in their Treasury.
Powell’s comments align with a broader shift toward a pro-crypto stance in Washington. Congress passed bipartisan crypto legislation, and the SEC retreated from its aggressive enforcement approach after pausing several major lawsuits.
Additionally, Treasury signaled its openness towards stablecoin supervision, and legislators continue to press for regulatory clarification to prevent innovation from shifting offshore.
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