$1 billion redeemed, Citi bucked the trend and promoted a Bitcoin ETF

According to Woofun AI, Citigroup (C.US) is bucking the trend and vigorously promoting BTC and ETH spot ETFs to its high-end wealth management clients. This move occurred against the backdrop of significant capital withdrawals from the US market for cryptocurrency funds.

Despite recent swings in investor sentiment leading to significant capital withdrawals, Citibank (C.US) maintains that holding regulated digital assets through brokerage accounts is a key step in optimizing portfolios for investors seeking to go beyond traditional stock and bond allocations.

This strategic persistence highlights the long-term layout intentions of Wall Street giants in the crypto asset mainstream process. Even with a sharp contraction in short-term market liquidity, infrastructure construction and customer education at the institutional level continue to advance. Notably, in the “Expanding the Scope of Investment: Understanding Cryptocurrency ETFs” report released in October, Citibank (C.US) Wealth Management clearly indicated the low long-term correlation between cryptocurrencies and traditional assets, stressing that their trend is often out of sync with the latter, thus providing a theoretical basis for risk diversification. The report also lists relevant risks and applicable conditions to help suitable investors understand the value of this emerging asset class. Citibank (C.US) Wealth Management has just released another report promoting Bitcoin and Ethereum spot ETFs, saying it is a regulated and possible way for related customers to add digital assets while holding stocks and bonds.

Woofun AI compiled data and showed that the rapid withdrawal of market capital did not shake the strategic strength of C.US (C.US), but the volatility behind the data cannot be ignored. In the last two trading days, investors pulled out about $10 billion from Bitcoin ETFs in the US market. Specifically, Bitcoin and Ethereum ETFs in the US market collectively lost $538 million on Monday. These funds, which allow investors to hold cryptocurrencies through brokerage accounts, had assets of $111.3 billion for the day. More detailed data shows that the Bitcoin Spot ETF (IBIT.US) in the US market lost another $398.62 million on November 2, while the Ethereum ETF (ETHA.US) also lost $139.8 million. This trend continued the outflow of funds on most trading days since the beginning of October.

Although the size of the outflow seems huge, the current Bitcoin outflow is only about 0.4% of the total assets of these funds of $98.12 billion. According to media reports, BlackRock (BLK.US)'s IBIT (IBIT.US) (BlackRock Bitcoin ETF) alone lost $405.3 million in one day. Looking back to an earlier point in time, investors had already withdrawn $643 million on August 30, the day after the hackers stole $6.3 billion from Binance. When investors redeem their ETF shares, the issuer will sell or return the corresponding bitcoins, so such withdrawals will increase the supply of bitcoins in the market, thereby suppressing the price in the short term.

At the infrastructure level, the Citibank (C.US) layout is being implemented at an accelerated pace. Citibank (C.US) said in August that its Custody+ platform will begin providing bitcoin escrow services to institutional customers later this year. This makes Citibank (C.US) the sixth of the 29 systemically important banks in the world that have provided or announced that they will provide Bitcoin custodian services out of 29 banks that are considered 'big and cannot be failed' by regulators. At the same time, he said that J.P. Morgan Chase (JPM.US) is not currently considering providing such hosting services. Siegel also gave an unconfirmed reason for silence: 'The Binance hack that occurred last week may be one of the reasons Citi hasn't announced the exact time yet. I heard that the service was originally scheduled to launch last week. ' Citigroup (C.US) did not confirm this statement, and its official schedule is still 'later this year'. Some media first reported on Citibank's (C.US) Bitcoin escrow plan in August. Whether Citibank (C.US) can determine a specific date before December 31, and whether the ETF redemption situation will improve, will determine whether Wall Street's layout progress can be synchronized again with investor demand.

This point in time will be a key litmus test for whether traditional financial institutions can truly take on the long-term value of crypto assets.