How Bitcoin took over Wall Street

Article author: Crypto Unfiltered

For years, Bitcoin was viewed as a wild experiment — something for geeks, libertarians, criminals and internet weirdos.Wall Street saw it as too volatile, too risky and, frankly, not worth their time.

Fast forward to today, and the same institutions that once scoffed at Bitcoin are now including it in their portfolios. Hedge funds, investment firms and asset managers aren’t just buying Bitcoin — they’re building products around it.

What has changed is that Bitcoin is proving its worth.

Bitcoin: Wall Street's new gold?

For decades, gold has been the asset of choice during times of inflation and uncertainty. But now, Bitcoin is becoming a strong competitor. Jan van Eck, CEO of VanEck, one of the largest asset managers in the gold ETF space, put it bluntly: "I view Bitcoin very differently from other digital assets. I view it as a store of value, similar to gold." In 2023, both Bitcoin and gold rose - gold rose 50% and Bitcoin more than doubled. At the same time, central banks hoarded gold at record levels, showing their growing distrust of the dollar.

Rather than competing with each other, Bitcoin and gold have become allies in the evolving financial landscape.

The "De-Dollarization" Effect

Another major factor driving the rise of Bitcoin is the global move away from the U.S. dollar.

After the U.S. froze Russia's financial reserves in response to the Ukraine invasion, many countries realized that their reliance on the dollar made them vulnerable. Countries like India, which is expected to surpass the entire European economy in the next decade, are actively looking for alternatives.

Bitcoin, as a neutral, borderless asset, is an obvious choice. It is not controlled by any government, making it a powerful hedge against financial restrictions and political instability.

Bitcoin ETFs: Onramp for Institutional Money

The real turning point came in early 2024: U.S. regulators approved Bitcoin spot ETFs.

These ETFs, managed by financial giants such as BlackRock, Fidelity, and VanEck, allow institutions to invest in Bitcoin without having to deal with the complexity of wallets or self-custody.

The impact was immediate:

• hedge fundsbecame the largest buyers, using ETFs for arbitrage opportunities.

• investment advisors managing billions are now beginning to allocate Bitcoin to client portfolios.

• BlackRockhas publicly stated plans to include Bitcoin in every portfolio.

This is exactly the same pattern we saw with gold ETFs in the early 2000s - gold became more investable and demand soared. Bitcoin is following the same path today.

Bitcoin-supported investments expand

Wall Street is not stopping at ETFs. It is launching a wave of new Bitcoin-related financial products, including:

• Leveraged Bitcoin ETFs — Funds that provide 2x exposure to Bitcoin price fluctuations.

• Bitcoin Funds — Publicly traded companies that hold Bitcoin as a reserve asset.

• Fixed Income Funds- Some asset managers are exploring the inclusion of Bitcoin in bond portfolios.

The Global Rise of Bitcoin

While the U.S. leads in ETF adoption, the real demand for Bitcoin may come from outside the traditional financial system.

It is clear that sovereign wealth funds in the Middle East have shown interest and are quietly exploring Bitcoin as a strategic asset.

Don’t forget politics. In the US, Donald Trump’s new focus on Bitcoin is influencing institutional sentiment. As one Wall Streeter put it:

“If Trump cares about Bitcoin, I care about Bitcoin.”

Whether you like him or hate him, his influence is real.

Final Thoughts: Bitcoin’s Inevitable Convergence

Bitcoin has gone through a classic cycle of innovation:

First, people ignored it. Then, people fought it. Now, people are embracing it.

With ETFs, enterprise adoption, and growing global demand, Bitcoin has expanded at an astonishing rate. Interestingly, it was originally created to exist outside of traditional finance, yet now Wall Street is driving its rise.

Is this a victory for Bitcoin’s original idea, or a sign that it’s being absorbed into the legacy system? We can debate that question another day. But one thing is clear:

Bitcoin isn’t just for Wall Street. Wall Street is adapting to Bitcoin, too.