Intesa Sanpaolo, Italy's biggest bank, torched nearly all its Bitcoin ETF holdings in the second quarter. The lender cut its BlackRock iShares Bitcoin Trust stake by 93.7%, dropping from 646,809 shares to just 40,723. That position collapsed from $22.8 million to $1.36 million in a single quarter.

The move wasn't random. The same filing shows Intesa simultaneously tripled its Ethereum staking ETF position, jumping from 116,200 to 349,600 shares of iShares Staked Ethereum Trust, now worth $7.1 million. A new defensive put position covering 500,000 Bitcoin shares also appeared, the kind of bet that profits if Bitcoin prices fall.

But here's the thing: the bank didn't abandon Bitcoin entirely. Its ARK 21Shares Bitcoin ETF holding of 3.47 million shares, worth $67.6 million, stayed locked in place. That's still its biggest crypto position by far. It also opened a small $293,190 stake in Morgan Stanley's Bitcoin Trust and left its $14.4 million Grayscale XRP Trust untouched. The Solana staking ETF position, though, cratered from 2,817 shares to seven.

The Yield Story

Ethereum staking offers something Bitcoin cannot: network rewards. BlackRock's staked Ethereum product earns yield on holdings, a feature that's becoming increasingly attractive to institutions hunting for returns in a world of tighter margins. That's the real driver behind the rotation.

Intesa's move mirrors a broader pattern. Trading powerhouse Jane Street cut its Bitcoin ETF position by 71% in the first quarter while nearly doubling its Ethereum holdings to 11.1 million shares and ramping its Fidelity Ethereum Fund from $3.1 million to $43.6 million. As a market maker, Jane Street does hold some inventory for clients, so pure directional conviction is harder to measure. Still, the timing suggests institutional appetite is shifting.

One caveat: SEC Form 13F filings only capture long positions in US-listed securities. They hide short exposure and the full picture of options strategies, so Intesa's actual net bet on Bitcoin versus Ethereum remains murky.

This article is informational and should not be taken as financial advice. Cryptocurrency markets are volatile and institutional positioning can change rapidly.