In the second quarter of 2024, Goldman Sachs and Morgan Stanley made significant investments in bitcoin exchange-traded funds (ETFs), reflecting a growing interest among major financial institutions in the cryptocurrency market. According to recent regulatory filings, the two banks collectively purchased more than $600 million in spot bitcoin ETFs, signaling their deeper engagement with digital assets.
Goldman Sachs disclosed that it acquired approximately $418 million in several newly launched bitcoin ETFs. The majority of this investment, nearly $238 million, was allocated to the iShares Bitcoin Trust, managed by BlackRock. Goldman Sachs also took positions in the Fidelity Wise Origin Bitcoin ETF, the Invesco Galaxy Bitcoin ETF, and smaller stakes in other bitcoin ETFs introduced earlier this year.
Similarly, Morgan Stanley reported a $188 million stake in BlackRock’s iShares Bitcoin Trust, along with smaller holdings in the Ark 21Shares Bitcoin ETF and the Grayscale Bitcoin Trust. These investments underscore the bank’s cautious yet growing involvement in the cryptocurrency space, despite reducing its overall exposure to spot bitcoin ETFs compared to previous quarters.
The influx of capital from these leading financial institutions highlights a shift in the traditional banking sector’s approach to digital assets. While the adoption of bitcoin ETFs by major banks like Goldman Sachs and Morgan Stanley marks a significant development, the market remains predominantly driven by individual investors. Despite this, the participation of such influential financial entities is likely to encourage broader acceptance and integration of digital assets within the global financial system.
Hedge funds also continue to play a vital role in the evolving crypto landscape. Millennium Management, for example, reported substantial positions in several bitcoin ETFs, although it trimmed its holdings during the second quarter. The fund held approximately $1.15 billion in bitcoin ETFs by the end of June, down from $2 billion at the close of the first quarter. Meanwhile, other hedge funds such as Hunting Hill Global Capital and Capula Investment Management have adjusted their portfolios, reflecting the dynamic nature of the cryptocurrency market.
The rise of bitcoin ETFs has been a critical factor in driving institutional interest in cryptocurrencies. Since their introduction in January 2024, these ETFs have experienced significant inflows, bringing total assets under management to over $53.5 billion by mid-August. However, the market has also faced challenges, with bitcoin prices fluctuating due to broader market volatility.
