A Bet Of $1.3 Billion: The National Bank Of Canada Anticipates A Drop In Bitcoin

The National Bank of Canada (BNC), one of the largest financial institutions in the country, seems to be taking a cautious, even bearish, stance on bitcoin. According to a recent filing with the Securities and Exchange Commission (SEC), the bank acquired a put option on a portion of its holdings in BlackRock’s Bitcoin ETF (the IBIT). This option would allow it to sell more than 1.3 million dollars worth of Bitcoin ETFs, indicating a possible anticipation of a decline in the asset’s price.

The National Bank of Canada adopts a bearish stance on bitcoin

Since the launch of Bitcoin ETFs in the United States in January 2024, institutional adoption of bitcoin has experienced significant growth . However, the inherent volatility of cryptocurrency is prompting some financial institutions to adopt a more cautious approach. The National Bank of Canada’s purchase of put options worth 1.3 billion dollars could be interpreted as a desire to hedge against a potential drop in the price of BTC.

According to the document submitted to the SEC , the National Bank of Canada held more than 94.3 billion dollars in assets as of December 31, 2024, spread across several asset classes. The acquisition of this put option is part of a context of capital outflows from Bitcoin ETFs observed in recent days. This trend coincides with a period of macroeconomic uncertainty and international trade tensions, prompting investors to abandon risky assets in favor of financial instruments deemed safer.

Increased caution in the face of market volatility

Despite a strong rise in bitcoin in 2024, recently reaching highs near 100,000 dollars, economic uncertainties are pushing some investors to secure their profits or anticipate a market correction. This bearish stance by the BNC does not necessarily mean a complete disengagement but rather a risk management strategy in the face of an still largely unpredictable market.

As Bitcoin ETFs continue to attract significant interest, this decision by the National Bank of Canada highlights the need for institutions to navigate carefully in a constantly evolving financial environment. It remains to be seen whether this strategy will prove rewarding in the months to come.