The Bank of New York Mellon (BNY Mellon) has revealed that it holds over $13 million in Bitcoin exchange-traded funds (ETFs) as of the end of the fourth quarter. This move is indicative of traditional financial institutions increasing their exposure to digital assets in a bid to adapt to the evolving landscape of finance.
In a recent disclosure filed with the SEC, BNY Mellon disclosed ownership of 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.
This development is part of a larger trend of major Wall Street banks cautiously dipping their toes into the world of digital assets. For example, JPMorgan Chase holds nearly $1 million in Bitcoin ETF shares, while Goldman Sachs reported an exposure of over $2 billion in Bitcoin and Ethereum ETF holdings at the end of the fourth quarter.
The approval of spot Bitcoin ETFs by the SEC in early 2024 has played a significant role in facilitating institutional and retail investors’ access to Bitcoin without the need for direct custody of the asset. This milestone has been widely viewed as a crucial moment for crypto adoption within traditional finance.
Despite the increasing participation through ETF investments, regulatory constraints still prevent major banks from directly holding or trading cryptocurrencies. Goldman Sachs CEO David Solomon emphasized this point in December, stating that while the firm offers advisory services on digital assets, it is restricted from holding Bitcoin as a principal.
However, there are signs of a shift in regulatory attitudes under the new US administration. Federal Reserve Chair Jerome Powell recently reiterated that the Fed will not hinder banks from offering crypto services as long as they manage associated risks. This stance aligns with a broader movement towards a more crypto-friendly regulatory environment in Washington.
Congress has advanced bipartisan legislation aimed at establishing clearer crypto regulations, while the SEC has shown a willingness to reassess its approach by pausing several lawsuits against major crypto firms. Additionally, the Treasury has signaled a willingness to oversee stablecoins, and lawmakers are pushing for regulatory clarity to prevent innovation from migrating offshore.
In conclusion, BNY Mellon’s holdings in Bitcoin ETFs are just one example of traditional financial institutions adapting to the changing landscape of finance. As regulatory attitudes evolve and major players in the industry continue to explore digital assets, it is clear that the future of finance will be increasingly intertwined with the world of cryptocurrencies.