Bitcoin Rises in Early 2026 as Banks Buy Crypto ETFs
Bitcoin has experienced a significant surge in the first week of 2026, reintroducing $2 trillion into the market. The bitcoin price has surged nearly 10% from its December lows, gaining momentum following the announcement from U.S. President Donald Trump’s media company regarding a bitcoin surprise. In the wake of a $17.3 trillion upheaval that is sending shockwaves through markets, market’s largest banks are preparing for a renewed foray into bitcoin and crypto. Morgan Stanley has submitted an application to establish its own spot bitcoin exchange-traded fund, along with a spot solana ETF, signaling a potential shift towards greater crypto adoption by the world’s largest banks.
“It’s interesting to see Morgan Stanley move into a commoditized market, and I suspect that means they want to move clients that invest in bitcoin into their ETFs which could give them a fast start despite their late entrance,” Bryan Armour told. “The entry of a bank into the crypto ETF market signifies a boost in legitimacy, potentially paving the way for others to follow suit.” In early 2024, Bitcoin ETFs, spearheaded by BlackRock’s bitcoin fund, made their debut on market, with the funds surging to a staggering $130 billion in total net assets, representing approximately 7% of bitcoin’s overall value.
Market observers were taken aback by Morgan Stanley’s decision, with analyst Eric Balchunas labeling it a “shocker” on X. “I appreciate this decision made by them. It’s smart,” Balchunas wrote. “They have approximately $8 trillion in advisory assets, and they have already approved those advisors to allocate, so it makes sense to be in their own branded fund rather than paying BlackRock or another firm.” James Seyffart expressed his astonishment regarding the recent bitcoin and solana ETF filings, stating he’s “very surprised by these. Didn’t see this coming.”
The current recovery of bitcoin’s price in 2026, which experienced a decline after a brief surge toward $95,000, has been described as “fragile.” “ETF flows echo that fragility,” Samer Hasn, stated in emailed comments, highlighting SoSo Value data that indicated U.S. spot bitcoin ETFs garnered $1.155 billion in inflows during the initial two trading sessions of the year, yet this was succeeded by $243 million in outflows. “This stop start pattern suggests that part of the demand is driven by tactical trades and arbitrage rather than sustained allocation. Until spot inflows become more consistent and less offset by sharp outflows, bitcoin’s upside is likely to remain vulnerable to short-term reversals rather than evolving into a durable trend.”
