Wells Fargo Boosts Ethereum ETF Holdings as Bitcoin Bets Shift

Key Insights

• Wells Fargo has boosted its Ethereum ETF holdings this year.
• It reduced its IBIT ETF exposure as it increased its Bitwise and Grayscale Bitcoin exposure.
• Ethereum price remains in a technical bear market after falling by 53% from its ATH.

Wells Fargo expanded its spot Ethereum ETF exposure during the first quarter even as broader crypto markets remained under pressure.

The latest regulatory filing showed the U.S. bank increased holdings across multiple Ethereum investment products while reshuffling portions of its Bitcoin ETF exposure.

Wells Fargo Has Boosted its Ethereum ETF Holdings

The latest filing by Wells Fargo showed that the company continued buying spot Ethereum ETFs in the first quarter of this year. Its BlackRock ETHA ETF holdings jumped to 1.1 million shares in Q1 friom the previous 672,000 in the previous one.

The company also bought Bitwise’s ETHW ETF, adding its position from 186k to 257k, a nearly 40% increase. In total, the firm now holds Ethereum ETFs worth over $21 million.

Wells Fargo joins other large institutional investors who have bought these ETFs. Goldman Sachs, the biggest one, holds funds worth over $720 million. It is followed by Jane Street, Millenium Management, Capula, and Susquehanna. These companies now hold Ethereum ETFs worth billions of dollars.

To be clear: some of these companies don’t necessarily hold the funds in their balance sheets. Rather, they hold these funds because they are prime brokers.

At the same time, companies like Jane Street and Susquehanna hold these funds because they are market makers. They do so as part of their hedging and arbitrage activity.

Ethereum ETF Inflows Have Crawled Back Recently

Data shows that spot Ethereum ETFs have started to stage a comeback in the past two months. They added $355 million in assets in April after experiencing outflows in the previous five consecutive months. In those five months, the funds shed over $2.5 billion in assets.

The funds have now added over $154 million in inflows this month. In contrast, spot Bitcoin ETFs have added over $5 billion in assets in the last three months. Wells Fargo sold some of BlackRock’s IBIT in the first quarter, even as it increased positioning in the Bitwise (BITB) and Grayscale’s BTC by 25% and 41%. Its IBIT holdings ended the quarter at $250 million.

BlackRock’s ETHA ETF has the lion’s share in the industry with over $7.4 billion in assets. It is followed by funds by companies like Grayscale, Fidelity, and Bitwise.

Ethereum Price Remains in a Bear Market

ETH price has crawled back in the past few months, moving from the year-to-date low of $1,730 to the current $2,300. Still, despite this recovery, the coin remains much lower than the all-time high of nearly $,4953.

There is a risk that the coin will remain under pressure in the near term now that inflation continues rising. A report released today, May 12, shows that the headline Consumer Price Index (CPI) rose to 3.8% in April. Core inflation, which excludes the volatile food and energy prices, rose to 2.8%.

These numbers have moved further away from the Fed’s target of 2.0%. As a result, chances are that inflation will continue rising, making it hard for the bank to cut interest rates.

Geopolitical risks also remain under focus after renewed tensions between the United States and Iran. Market participants continue monitoring whether worsening conditions could pressure broader financial markets and reduce appetite for risk-sensitive assets like Ethereum.

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