Author: Liu Jiaolian

Waking up, BTC attempted to rebound to 70k but failed, continuing to stay around 68k. The ten-year commitment real asset witness plan has reached its 35th month, the 66th note, and the 49th time to increase the position. This time the increasing price is 68486 dollars. Post-investment holding cost 60535 dollars. ROI 9%.

The recent hot topic in the circle is that Charles Schwab is going to start Bitcoin and Ethereum spot trading. It's set to be implemented at the end of Q1, and this is not a rumor, but a report from Decrypt [1]. Who is Schwab? A brokerage giant managing over 90 trillion dollars in assets. What does it mean when they come in? It means that your next-door retired old man will soon be able to buy Bitcoin with one click in his Schwab account just like buying Apple stock.

Some say this is good news, while others say it's bad news. Don't rush to conclusions; we need to see what kind of calculations this group of smart money on Wall Street is making.

Who exactly is holding Bitcoin on Wall Street?

First, let’s look at a set of data. According to an in-depth analysis from BeInCrypto, as of the end of March 2026, Wall Street holds over 1.6 million Bitcoins through ETFs and corporate balance sheets [2]. This number is not small. But BeInCrypto reminds us that many holdings are not based on long-term belief but are part of arbitrage strategies—such as the classic basis trade, buying spot ETFs while shorting CME futures to capture price differences [2].

Who is buying? Who is selling? 13F filings reveal some interesting trends. Millennium added 8100 BTC, Abu Dhabi's Mubadala increased their position by 2300 BTC, and Morgan Stanley added 1900 BTC. Dartmouth becomes the fourth Ivy League school to enter the Bitcoin market. But at the same time, Brevan Howard cut 17700 BTC, and the Royal Bank of Canada cleared its position [2].

Some are entering the market, while others are exiting. This is not called FOMO; this is called allocation. Institutions are adjusting their positions based on market fluctuations, not making decisions on a whim.

But the more crucial question is not who is buying, but who is holding these Bitcoins.

Coinbase is the dominant player, holding over 80% of U.S. Bitcoin and Ethereum ETF assets [2]. This has been acknowledged by CEO Brian Armstrong. Only Fidelity manages its own funds, while VanEck chose Gemini. The other eight are all with Coinbase.

This is not decentralization; it is centralized custody. One failure, one network attack, or one regulatory storm can impact multiple funds at once. If Satoshi Nakamoto saw this scene, who knows how they would feel.

This trend of centralization is in opposition to the original spirit of Bitcoin. But Wall Street doesn't care about spirit; it cares about compliance and security. To them, handing over coins to Coinbase is as natural as handing over stocks to DTCC. The problem is that DTCC has over a hundred years of accumulated trust, while Coinbase has only a few years of history and has experienced multiple outages.

Tokenized funds are another path, a path that provides risk exposure without holding Bitcoin.

BlackRock's BUIDL fund, a tokenized U.S. treasury money market product, manages assets reaching 2.85 billion dollars [2]. More importantly, BlackRock has already begun trading BUIDL on Uniswap and has purchased UNI governance tokens. This is its first direct engagement with DeFi trading infrastructure [2].

Got it? BlackRock's approach is to put traditional assets on-chain, allowing crypto capital to gain risk exposure to traditional assets through tokenized funds. Its IBIT product facilitates traditional capital in the U.S. stock market to gain risk exposure to crypto assets, while its BUIDL fund conducts the opposite business. A win-win situation for both sides.

What is Wall Street's ultimate goal? A deep analysis from CryptoSlate gives us a clue.

The article points out that in the first quarter of 2026, Wall Street is systematically shrinking DeFi's claim to the future of finance [3]. ICE announced that the NYSE is constructing a tokenized securities platform with 24/7 operation and instant settlement using stablecoin funding. WisdomTree launched a tokenized money market fund for 24/7 trading. The Fed, FDIC, and OCC jointly stated that tokenized securities should receive the same capital treatment as their non-tokenized versions. The SEC approved Nasdaq's proposal to trade certain securities in tokenized form [3].

All these actions point in one direction: traditional finance is adopting blockchain technology and fitting it into a regulatory framework it understands. They don’t need DeFi, don’t need Uniswap, don’t need Compound. They can build their own on-chain trading platform, issue tokenized assets themselves, and set the rules.

This reminds Jiaolian of an old adage: Wall Street is not here to embrace cryptocurrencies; Wall Street is here to assimilate cryptocurrencies.

For DeFi, this is indeed a test of trust.

Currently, the total capital on-chain exceeds 330 billion dollars, including about 317 billion dollars in stablecoins, nearly 13 billion dollars in tokenized U.S. treasuries, and 1 billion dollars in tokenized stocks [3]. Where will this money ultimately flow? To DeFi protocols that do not require KYC but are controlled by a few custodians at the backend? Or to fully compliant tokenized platforms backed by banks?

The answer is not clear. DeFi has an irreplaceable advantage: composability. You can lend on Aave, trade on Uniswap, and provide liquidity on Curve; all these operations can be seamlessly combined without anyone’s permission. This is something tokenized platforms cannot do because they require a centralized gatekeeper to approve downstream connections [3].

However, composability is also a double-edged sword. The 285 million dollar vulnerability event at Drift is a testament to this. The attacker stole huge amounts of funds by controlling access to the management layer. Drift’s TVL fell from about 550 million dollars to below 250 million dollars [3]. Furthermore, since Drift's infrastructure is connected to downstream vaults, yield strategies, and collateral positions, the impact of this attack radiated throughout the entire Solana DeFi ecosystem.

Chainalysis data shows that private key leaks accounted for 43.8% of stolen cryptocurrency in 2024, making it the largest attack category. TRM Labs' data shows that in 2025, attackers stole 2.87 billion dollars through nearly 150 hacks, with infrastructure attacks targeting keys, wallets, and access control layers being the most significant [3].

The lesson is clear: the risks of control layers, governance layers, and access management layers are now greater than the smart contract code itself. And DeFi's security culture has not kept pace with this change.

Schwab's entry is both a signal and a catalyst.

The signal is that mainstream financial institutions are finally no longer hesitating and are fully entering the crypto space. From BlackRock to Fidelity, from Schwab to Robinhood, from NYSE to Nasdaq, every corner of Wall Street is laying out its strategy.

The catalyst is that this will accelerate the flow of capital from decentralized platforms to compliant platforms. When your Schwab account can buy Bitcoin directly, will you still register, transfer, and learn a wallet at Coinbase? When the NYSE's tokenized stocks can be traded 24/7, will you still seek a stock token packaged by some obscure protocol on Uniswap?

For individual investors, this is a moment worth reflecting on. In the past, we said do not rely on custodians, take control of your private keys. Now Wall Street says trust us with custody; it’s safer and more convenient. In the past, we said do not use intermediaries; embrace DeFi. Now Wall Street says we offer the same services, but more compliant and reliable.

Which is right? Which is wrong? There is no absolute right or wrong. Only choices and trade-offs.

If you are a long-term believer, trusting that Bitcoin's original intention is decentralization and censorship resistance, then you should stick to non-custodial wallets, run full nodes, and use DEXs. If you are merely an ordinary investor looking to profit from Bitcoin's rise and do not care who is holding it, you are likely to choose products from Schwab, Fidelity, or BlackRock, purely for pragmatic reasons, which seems reasonable enough.

These two choices will coexist in the long term. Wall Street cannot assimilate all of crypto, and DeFi will not eliminate traditional finance. The final result may be as CryptoSlate said, DeFi capturing 5% to 10% of on-chain capital, about 16 billion to 33 billion dollars, becoming a premium layer on top of tokenized infrastructure, while most capital stays within compliant platforms [3].

Back to Schwab’s matter. Perhaps it is: short-term good news, long-term complexity.

Short-term good news, because Schwab's entry will bring in a lot of new funds, pushing up prices. Long-term complexity, as more and more trading occurs on compliant platforms, on-chain liquidity will decrease, the space for DeFi to survive will be compressed, and Bitcoin's original vision will be diluted.

But in any case, this is an irreversible trend. Wall Street has already boarded the train and is trying to take control of the steering wheel.

We passengers who got on the train at earlier stops must either choose to continue sitting in the back or choose to jump off. There is no third path.

References:

[1] Decrypt, "Charles Schwab Is Gearing Up to Offer Bitcoin, Ethereum Spot Trading", link

[2] BeInCrypto, "Who's Really Holding Wall Street's Crypto?", Apr 4, 2026. link

[3] CryptoSlate, "As Wall Street moves on-chain, DeFi faces a $330 billion trust test", Apr 5, 2026. link

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