Barclays and Citigroup Raise Bitcoin ETF Stakes: Is It New Money?

Banks have started to raise their stakes in spot Bitcoin ETFs noticeably: according to the first third-quarter 13F filings, their weight among holders of these funds grew from 3.2% to 4.9%. Barclays and Citigroup supplied the loudest examples. For the market this matters more than a one-off purchase, because bank advisers can now offer these funds to clients.

What the Barclays and Citigroup filings show

As of Sept. 30, Barclays held 3.94 million IBIT shares from BlackRock worth $187 million. At the end of June it was 2.66 million shares worth $88.5 million, so the share count rose 48%. Citigroup opened a new position in Fidelity's fund (FBTC) of about $119 million and added 50% to its IBIT shares, to 521,000.

The data is still incomplete. JPMorgan, Wells Fargo and hedge funds Millennium and Schonfeld had not reported at the time of writing, and the 13F deadline falls on Monday.

Who else holds the funds, and how much

Bitwise compared the filings of 1,389 institutions that had reported in time. The combined value of their spot Bitcoin ETF positions rose from $3.35 billion to $5.25 billion. Banks account for $258 million of that, against $107 million in the second quarter.

Bitwise analyst Camran Khosravi told Cointelegraph that, judging by early data, the share of longer-term holders among fund investors is growing. He tied this to the fact that financial advisers at major banks and wealth platforms can already recommend Bitcoin ETFs to clients. His expectation is simple: this will show up more clearly in filings over the coming quarters.

Is this real new money?

There is a caveat. PrimeXBT analyst Jonatan Randin reminded readers to look at share counts, not only at the dollar amount. By his account IBIT gained about 41% in price in the third quarter, so part of the growth came from the price itself.

For Barclays and Citigroup the share counts also rose by almost half, so it is not only revaluation. There is one more nuance, though. The filings capture the position on Sept. 30, before the drop in Bitcoin and the outflows from the funds. In the third quarter US spot Bitcoin ETFs took in about $6.34 billion in net inflows, and in the fourth, through Tuesday, they lost roughly $2.1 billion, according to SoSoValue.

What this means for price and demand

Bank positions are still small compared with the whole market, so a direct effect on the price is not to be expected. The makeup of demand matters more. In an October CoinShares survey, 40% of respondents said they hold digital assets for diversification and fewer than 9% for speculation. Such a base is less sensitive to weekly swings.

Bitcoin at the same time trades near $73,400, close to an 11-week low, and the funds are losing money. So long-term holders are in the base, but they do not remove the pressure from short-term selling. For those considering to sell Bitcoin for dollars directly rather than through a fund, the difference matters too: ETFs and the spot market move at different rhythms.

What to check after Monday

• Whether JPMorgan and Wells Fargo show a similar rise in share, rather than an exit.
• How much of the growth comes from new shares and how much from price.
• Whether the trend holds in the fourth quarter, where outflows already exist.

For now the picture is this: banks are slowly entering Bitcoin ETFs even though the price is falling. The full statistics will appear once the big players file.