The Bank of Montreal (BMO), Canada’s third-largest bank by assets, discreetly acquired around $150 million worth of spot Bitcoin exchange-traded funds (ETFs). This investment was revealed when BMO submitted its Form 13F-HR to the U.S. Securities and Exchange Commission (SEC) on Thursday. The SEC mandates that institutional investment managers overseeing more than $100 million in U.S. assets file this form.
BMO’s most significant purchase was approximately $139 million in BlackRock’s iShares Bitcoin ETF. The remaining $11 million was allocated across three other funds: Ark 21Shares Bitcoin ETF, Fidelity Wise Origin Bitcoin Fund, and the Grayscale Bitcoin Trust. Additionally, the bank invested about $17,000 in the ProShares Bitcoin ETF, which focuses on Bitcoin futures contracts.
Similarly, the National Bank of Canada has made a notable entry into the crypto market with a $2 million investment in Bitcoin ETFs.
Growing institutional adoption of bitcoin ETFs
This move reflects the increasing institutional participation in Bitcoin investment products, hinting at a rising interest from traditional financial institutions. Some market analysts suggest that other Canadian banks may follow BMO’s lead, marking the beginning of a broader trend toward Bitcoin adoption through regulated investment vehicles.
This trend aligns with the evolving landscape of traditional finance, where banks and asset managers are gradually integrating Bitcoin into their portfolios.
Institutional caution and market reactions
Despite the growing interest, skepticism remains within the crypto community. Critics question why banks are choosing ETFs over direct Bitcoin holdings, arguing that ETFs lack the benefits of self-custody. Others see ETF investments as a more cautious approach, allowing institutions to gain exposure to Bitcoin while managing regulatory and security concerns.
Meanwhile, BlackRock’s launch of the iShares Bitcoin ETF in Canada has expanded investment options for those seeking regulated exposure to Bitcoin.
Expansion of bitcoin ETFs in the market
BlackRock Asset Management Canada Limited recently introduced the iShares Bitcoin ETF, trading under the tickers IBIT and IBIT.U on Cboe Canada. This ETF provides a regulated avenue for investors to access Bitcoin through traditional brokerage accounts. Designed to track Bitcoin’s price movements, the fund primarily allocates its assets to the U.S.-based iShares Bitcoin Trust ETF (U.S. IBIT), which holds long-term Bitcoin investments.
The launch comes amid a surge in institutional interest, with U.S. spot Bitcoin ETFs recording a streak of inflows in January.
Central Banks weigh bitcoin investments
Reports suggest that central banks are beginning to evaluate potential Bitcoin investments. Standard Chartered’s Geoffrey Kendrick noted that discussions surrounding crypto reserves—particularly by former U.S. President Trump—could influence central banks to consider holding Bitcoin. Currently, the U.S. government owns over 198,000 Bitcoins and may expand its holdings.
Elsewhere, Czech National Bank Governor Ales Michl proposed allocating up to 5% of the central bank’s reserves into Bitcoin, with a meeting scheduled to discuss the proposal. In Switzerland, Bitcoin advocates are pushing for a national vote to include Bitcoin in the Swiss National Bank’s reserves.
Bitcoin ETFs strengthen market presence
The prominence of Bitcoin ETFs in the broader ETF market continues to rise. Crypto research firm Ecoinometrics recently highlighted that three Bitcoin ETFs have entered the top 100 funds by assets under management.
As of February 6, BlackRock’s IBIT ranked 31st with approximately $56.5 billion in assets, while Fidelity’s FBTC and Grayscale’s GBTC ranked 89th and 94th, with $20.4 billion and $19.5 billion, respectively.
This institutional embrace of Bitcoin ETFs signals a significant shift, further integrating cryptocurrency into mainstream finance.
