Wall Street's Bitcoin Bet: Big Banks Are Buying While Retail Panic Sells

Major U.S. Banks Accumulate Bitcoin Amid Market Volatility

Major U.S. banks appear to be buying Bitcoin during recent price swings, even as many retail investors sell out of fear. The trend highlights a clear gap between how large firms and individual traders respond to market stress.

Binance founder Changpeng Zhao pointed this out in a post on X on January 10, writing, "While you were panic selling, U.S. banks were loading up on Bitcoin," Zhao wrote, referring to new disclosures from Wells Fargo & Company (WFC). The bank reported $383 million in Bitcoin (BTC) exchange-traded fund holdings, more than double its position from the prior quarter.

At the same time, Bitcoin prices fell sharply from their October high above $126,000 to recent levels near $90,000. As prices dropped, retail sentiment weakened fast. The Crypto Fear and Greed Index fell to a reading of 10 in November, which signaled extreme fear across the market.

Institutions Take a Long View

Meanwhile, large investors treated the pullback as an opportunity to add exposure. Wells Fargo gained its Bitcoin position mainly through the iShares Bitcoin Trust from BlackRock (BLK). This structure lets banks gain price exposure without holding Bitcoin directly.

Other large holders followed a similar path. Strategy (MSTR), formerly known as MicroStrategy Incorporated, purchased 1,229 Bitcoin for $108.8 million in late December at an average price of approximately $88,568. In addition, Harvard University increased its Bitcoin exposure during last summer's market decline, bringing its total holdings to about $443 million.

The difference comes down to time horizon and structure. Large investors often plan years ahead and avoid heavy leverage. In contrast, many retail traders rely on borrowed funds. During the late November selloff, nearly 396,000 retail accounts were liquidated, with losses near $2 billion.

ETF Demand Remains Firm

Despite short-term fear, demand from large firms remains steady. Bitcoin exchange-traded funds saw about $1 billion in outflows during December. However, over the full year, BlackRock's spot Bitcoin fund still attracted more than $25 billion in net inflows.

Looking ahead, analysts expect this trend to continue. Bitcoin ETF assets are forecast to reach between $180 billion and $220 billion by 2026. As access expands through banks like Bank of America Corporation (BAC) and Vanguard Group Inc., large investors are likely to remain active even during periods of price stress.

Overall, recent moves suggest that while retail investors focus on short-term swings, large institutions continue to build exposure with a longer view in mind.