Citi pitches bitcoin and ether ETFs to wealthy clients as $1bn leaves US crypto funds
Citi Wealth has begun recommending spot bitcoin and ether exchange-traded funds to its high-income clients, publishing a guide titled "Expanding the Investable Universe: Introduction to Crypto ETFs" that frames the funds as the regulated, brokerage-account route for suitable clients to hold digital assets alongside stocks and bonds. The report is an introduction, not the launch of a Citi-branded crypto fund.
The timing cuts against the flow. US bitcoin ETFs shed $398.62 million on 2 November, after investors withdrew $643 million on Friday 30 October, the day after a $6.3 billion hack at Binance, according to SoSoValue figures cited by Token Times. Ether ETFs lost a further $139.80 million on 2 November, extending a run of outflows that began in early October. Across the two sessions, roughly $1 billion left US bitcoin funds.
In scale, the damage is modest: the withdrawals amount to about 0.4% of the $98.12 billion held by US spot bitcoin ETFs, Token Times reported. BlackRock's IBIT alone saw $405.3 million redeemed in a single day, according to BeInCrypto. When investors redeem shares, the fund manager sells or returns the corresponding bitcoin, putting more coins up for sale in the market.
Citi is also building the plumbing. In August it said its new Custody+ platform would hold bitcoin for institutional clients this year. Matthew Sigel, head of digital assets research at VanEck, counts Citi as the sixth of 29 globally systemically important banks to have institutional bitcoin custody live or announced, after BNY, Standard Chartered, Société Générale, State Street and Deutsche Bank. JPMorgan has said custody is off the table for now, Sigel said.
Sigel floated an unconfirmed explanation for Citi's silence on timing: "the Binance hack last week could be one reason Citi has stayed quiet on timing. I heard that the service was already set for launch last week." Citi has not confirmed that account and publicly maintains its guidance of "still this year". If the bank sets a date before 31 December and outflows ease, it will show whether Wall Street and its investors are walking in the same direction again.
What it means for Pakistan: For Pakistani investors, Citi's move matters less as a product than as a signal: the largest global banks are treating regulated crypto ETFs as a mainstream portfolio line, a framing Pakistan's own market lacks because it has no approved spot crypto ETF and its virtual asset framework is still being built by PVARA. Until licensed local vehicles exist, Pakistani exposure to these funds runs through offshore brokerage accounts and foreign currency, which sits awkwardly with State Bank rules on holding assets abroad. The Binance hack behind the outflows is the more immediate lesson: Pakistani users of global exchanges carry counterparty and custody risk that no local regulator can recover for them.
