Cryptocurrency on Wall Street: how the approval of Bitcoin and Ethereum ETFs changed big banks’ attitudes towards crypto

Introduction

Just a few years ago, the heads of the world’s largest banks called Bitcoin a “money laundering tool” or a “mirage.” However, recent years have been a turning point: the approval of exchange-traded funds (ETFs) for Bitcoin and Ethereum in the US has forced financial giants not only to reconsider their position, but also to begin actively integrating digital assets into their systems. Today, cryptocurrency is no longer the “Wild West” but a legitimate part of Wall Street portfolios.

From skepticism to legitimization

The path of cryptocurrencies on Wall Street resembles an evolution from complete rejection to recognition as a strategic asset. This transformation is not just a change in sentiment, but a fundamental reformatting of the global financial system, where digital assets have received official approval from regulators and the world’s largest capitalists.

Stage 1: The Age of “Great Denial” (2017 – 2021)

Just a few years ago, the banking sector was skeptical about cryptocurrency. In 2017, JPMorgan Chase CEO Jamie Dimon called Bitcoin a “fraud” that would eventually burst. Banks viewed crypto solely as a tool for the shadow economy. The main arguments against it were volatility, lack of intrinsic value, and the high risk of falling under regulatory sanctions.

Stage 2: Quiet interest and “Crypto Winter” (2022 – 2023)

After the collapse of the FTX exchange and the market crash, skeptics felt like winners. However, it was during this period that important behind-the-scenes work took place. While prices were falling, two giant international asset management companies providing financial services, including investment funds, portfolio management, brokerage services, and pension plans, and among the largest players in the global financial sector, Fidelity and BlackRock, began to develop reliable custody systems and submit their first applications to create funds. Banks began to separate “speculative tokens” from “blockchain technology,” recognizing that the network itself could speed up interbank payments.

Stage 3: ETF Approval (2024 – 2025)

The US Securities and Exchange Commission (SEC) decision legalized cryptocurrency at the state level. Banks are no longer required to explain to regulators where they obtained their cryptocurrencies. An ETF is a regular security, just like Apple shares or US bonds. When BlackRock openly declared that Bitcoin was a means of hedging risks, other giants (Goldman Sachs, Morgan Stanley) were forced to adapt quickly so as not to lose customers.

Banks adapting to new realities

The approval of spot ETFs has been a catalyst for a fundamental transformation of banking strategies. Financial giants have officially moved from being passive observers to active providers of crypto services. Previously, banks took a defensive stance, and advisors were strictly prohibited from even mentioning cryptocurrency in conversations with clients. Today, however, banks are implementing algorithms that automatically suggest adding 1-3% Bitcoin ETFs to conservative portfolios to increase overall returns.

At the same time, banks have seen a huge niche in providing custodial services. Realizing that large institutional investors trust the century-old reputation of traditional financial institutions more than young crypto exchanges, giants such as BNY Mellon and State Street have begun to actively build their own infrastructure for the secure storage of digital keys. Thus, instead of fighting the outflow of capital into digital assets, banks decided to become a reliable “repository” for this flow, earning commissions for administration and security.

A separate strategic vector was the tokenization of real assets (RWA). The approval of the Ethereum ETF has prompted Wall Street to use blockchain as a technological rail for traditional finance. The launch of BlackRock’s Ethereum-based BUIDL tokenized fund has shown that banks are now looking to convert bonds, real estate, and gold into digital form. This reduces settlement times from several days to a matter of seconds, radically optimizing operating costs. In fact, the current strategy of banks is no longer to reject cryptocurrencies, but to tame them and turn them into a highly effective tool for making profits in the new digital reality.

Transformation in numbers

Digital indicators for 2024-2025 show that crypto ETFs have become the most successful financial product in Wall Street history, surpassing even gold funds in terms of growth rates:

Total assets under management in cryptocurrency ETFs in the US have crossed the $190 billion mark. This indicates that the market is absorbing billions of dollars every month, turning Bitcoin into an asset with liquidity comparable to leading stock indices.
According to 13F reports to the SEC, more than 2,000 large institutional players (pension funds, hedge funds, and banks) have officially declared ownership of shares in crypto funds. This means that more than 25% of all capital in ETFs now belongs to professional managers rather than retail players.
The market for tokenized real assets, including US government bonds on the blockchain, has grown to $7 billion.
The amount of ETH held by corporate structures and through ETFs has reached 10 million coins. This has effectively cemented Ethereum’s role as a “settlement layer” for financial giants, where the speed and transparency of blockchain are replacing outdated banking protocols.

These indicators are direct evidence that the era of experimentation is over and the era of capitalization has begun, where cryptocurrency has become an integral part of global financial reporting.

What awaits us in the near future?

The tectonic shift in attitudes toward cryptocurrencies is fundamental, namely the ultimate disappearance of reputational risk. Previously, a banker offering crypto assets was perceived as an adventurer, but today he looks like a professional using advanced financial instruments. Cryptocurrency is no longer an “anti-system” but has become part of the system itself, providing the market with a stable inflow of liquidity and protection from excessive volatility.

The next step will be the mass transition of traditional securities, real estate, and derivatives to blockchain. We will see the creation of “universal registries” where Apple and Bitcoin shares will be traded within a single infrastructure. Following banks, ordinary public companies will begin to include crypto ETFs in their balance sheets as a reserve asset, similar to how they currently hold cash or short-term bonds. After the success of Bitcoin and Ethereum, the market is waiting for the emergence of basket ETFs (for example, the top 10 cryptocurrency index), which will allow investors to buy “the whole market” with one click.

The approval of ETFs has not only changed the attitude of banks, it has blurred the line between digital and traditional finance. Wall Street is no longer trying to stop the crypto revolution, but is leading it, turning blockchain into a new operating system for global capital.

At Manimama Law Firm

At Manimama Law Firm, we help businesses navigate this new reality effectively. We prepare documentation, manage application processes, and develop long-term crypto compliance strategies.