Global institutions are expected to pump trillions of dollars into Bitcoin over the next decade. Bitwise Chief Investment Officer (CIO) Matt Hougan projects that this capital flow will arrive in waves from financial advisors, family offices, pension funds, sovereign wealth funds, all the way to central banks.
The total wealth currently managed by these various global institutions is estimated to reach $100 trillion to $200 trillion. According to Hougan’s calculations, an allocation of just 1% of that total fund would be enough to support the long-term price target he set for Bitcoin. Hougan provided a stark comparison: if Bitcoin can capture 50% of gold’s market share as a store of value - which is valued at $30 trillion in total - the price of a single BTC would reach $715,000.
Signs of this big money entering are beginning to show. The first wave emerged from 13F filing reports for spot Bitcoin ETFs, which show financial advisors and family offices starting to lead the accumulation. This trend was further reinforced after banking institutions like Morgan Stanley and Wells Fargo took steps by opening direct Bitcoin investment access to their clients.
Strategy’s Two Weakening Weapons
Amidst these projections of new capital inflows, the landscape of major players in the Bitcoin market is set to change. Hougan assesses that Strategy - the world’s largest corporate holder of Bitcoin which currently hoards 842,138 BTC - no longer holds the role as the main engine driving Bitcoin demand in the future.
There are two key advantages of Strategy that are now losing their momentum. First, the presence of spot Bitcoin ETFs provides a direct investment path for investors, making the high net asset value (NAV) premium that Strategy stock has enjoyed difficult to sustain. Second, the company is deemed to have reached its capacity limit in utilizing debt space or issuing preferred shares that can be absorbed by the market.
“The easy runway of accumulation is over,” Hougan said. This does not mean Strategy will stop adding to their reserves. The company is believed to continue buying Bitcoin, but its pace is predicted to slow down and its action will depend more on existing market price cycles.
The Baton of Demand
This shift places ETF products and a lineup of large institutions as the new deciders, taking over the position of the single company that has constantly absorbed open market supply. Demand for Bitcoin is not stopping, but rather shifting into the hands of players with deeper capital.
Now, the benchmark is no longer how much debt a single company can issue to buy Bitcoin, but how fast pension fund managers and central banks allocate their assets to Bitcoin. Reported from CoinDesk.
Also read: What Is Bitcoin Halving?
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
