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Bitcoin ETF: Smartest Guys In The Room? Big Wall Street Firms Hold Bitcoin Bag

It’s not just amateurs getting hit by the Bitcoin ETF crash. The implosion is snaring big Wall Street firms and pros, too.

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Goldman Sachs is the largest holder of ProShares Bitcoin Strategy ETF (BITO) with 10.5 million shares. That’s as of the latest position size filing on Sept. 30, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence. Goldman Sachs actually increased its position by nearly 20% during the third quarter. And shares of the largest Bitcoin ETF, which invests in Bitcoin futures, lost two-thirds of their value this year.

Meanwhile, Morgan Stanley Investment Management and ARK Investment Management are the No. 2 and No. 3 largest holders of another popular Bitcoin fund, Grayscale Bitcoin Trust (GBTC) as of their latest filings on July 31 and Sept. 30, respectively. Morgan Stanley owned 11.2 million shares and ARK Investment 6.5 million shares. Grayscale Bitcoin is down 74% this year.

“Now, it appears, the crypto world is grappling with a crisis of its own.” said Jack Ablin, strategist at Cresset Capital Management. “While it’s too early to predict a widespread crypto cascade, this year’s events carry broader implications for investors.”

How widespread and serious is the impact from falling Bitcoin prices?

Who Owns Bitcoin?

It’s a bad year to own Bitcoin. The price of Bitcoin dropped 74% this year to less than $17,000, says Coinbase.

Bitcoin prices are collapsing this year amid a stock market bear market, rising dollar and economic weakness. And the financial implosion of Bitcoin exchange, FTX, also shook the entire cryptocurrency ETF ecosystem.

Questions remain of how widespread pain from Bitcoin ownership is. Many large venture capital investors put money into FTX. And yet, Bitcoin ETFs only made investing in the cryptocurrency itself more mainstream.

“Cryptocurrency traders are still saying What-the-FTX is happening?” said Edward Moya of Oanda. “Bitcoin and Ethereum are hanging onto any broader risk appetite for dear life.”

Cryptocurrency ETFs Get Hammered

Bitcoin ETF investors are feeling the heat.

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