Money is flowing back into crypto. Bitcoin funds took about $2.6 billion in September, and investors are branching out into smaller coins like Solana and XRP. Wall Street is also moving onto the blockchain, with digital versions of stocks hitting records at $15.6 billion in trading last month. Joining me is Paul Howard, Senior Director at Wincent. Paul, it is great to have you back with us.
Thank you Johnny.
Bitcoin funds pulled in about $2.6 billion in September. Who is buying right now and what is bringing this back?
August was around $3.5 billion and September around $2.6 billion — so flows are still coming into the cryptocurrency market, largely through ETF wrappers. If you saw Bitwise’s latest report, they had a survey on institutional activity in the space. Many respondents — and there were increasing numbers — were not planning to pull back from trading or from holding ETF or cryptocurrency assets. What we are seeing is a maturity of the asset class. The same buyers are coming in at an institutional level — wealth managers, financial institutions, hedge funds — and the wrapper is now giving access to so many more people that the institutions are taking on positions without being so concerned about getting in at the lows and selling at the highs.
Your data shows institutions are holding less Bitcoin and Ethereum but their Solana holdings are up tenfold and XRP more than threefold. What does that tell us?
What we are seeing tends to be the same players coming in to buy spot for their ETFs, but doing that with a broader selection of assets. We have seen Solana and XRP ETFs gain allocation. We have also seen Zcash gain allocation. Although Bitcoin is slightly down — around 5% over the last 12 months — a lot of the other ETF wrappers have really accelerated their adoption. My sense is that this is existing fund managers and portfolio managers adding other assets rather than a new wave of participants coming in.
DTCC, Nasdaq, Robinhood, and Coinbase are now in the same conversation. What does Wall Street coming on-chain actually mean for everyday investors?
For me, when we talk about institutions coming on-chain, we are really talking about the ubiquitous layer — a seamless transition where stocks, equities, futures, options, commodities, and crypto are all under one wrapper. Morgan Stanley, Goldman — these big household names now have digital asset trading desks and a digital asset strategy, which is giving their wealth management teams new products to offer. Coming on-chain means that these new products are being offered by existing institutions on Wall Street. It does not magically need a new trading platform or new financial institution.
Digital versions of stocks traded at a record $15.6 billion in September. What does tokenised stock actually mean — and does 24/7 stock trading make sense right now?
There is going to be a lot of folks in traditional finance who will not like this, but there is real appetite to move to a 24/7 trading environment — and crypto is perfectly set up for this. All blockchain and DLT technology runs 24/7 as it is. A tokenised stock is generally a 1-to-1 mapping from a stock or share into a crypto representation of that product. There are several ways those can be constructed legally — one involves you actually owning the product rather than a CFD. Gone are the days when all the liquidity was at the close for a rebalance. We are going to see a lot more trading opportunities as stocks move on-chain.
It has been a year since the October 10th crash. What has changed in the Bitcoin market and is it safer now?
If you remember, we flushed out almost $20 billion of leverage this time last year. From the data we see now, a lot of market makers and desks have stepped away from providing the type of liquidity that creates crisis events. What we have been able to observe is a far deeper order book than we saw one year ago. Firms like ourselves with large balance sheets are posting out more liquidity and deeper down in the order books so we can manage volatility more consistently. Leverage has decreased, but there is a lot more appetite for alt and layer two currencies — many of these had very small market caps a year ago and are now part of the ETF game and being added to people’s balance sheets further down the risk curve than Bitcoin historically.
Paul, thank you so much for joining us today.
Thank you Johnny. Have a great day.
