Institutions Pile In as Sovereign Wealth Funds Flock to Bitcoin

Research from Bitwise suggests that institutional investors are increasingly treating Bitcoin as a hard asset alongside gold, and benefiting from its upside over the past years.

According to Ryan Rasmussen, Head of Research at Bitwise, these institutions are piling in on Bitcoin due to its potential as a hedge against currency debasement. He noted that even relatively small Bitcoin allocations can translate into significant buying power, given the enormous pools of capital controlled by sovereign wealth funds.

Rasmussen also highlighted that institutions are exploring various routes into Bitcoin, including spot ETFs and direct custody, mining, and options strategies designed to generate income from their holdings. The research found that several major institutions remained resilient during Bitcoin's bear market, buying more during the decline rather than selling.

Bitwise spoke with 15 major institutions as part of its institutional crypto adoption research, including pensions, endowments, foundations, and sovereign wealth funds. Rasmussen believes that Bitcoin's latest bear market bottomed near $60,000, pointing to the market's increasingly muted reaction to negative developments as a sign that selling pressure had been exhausted.

The prior week's $2.5 billion in spot BTC ETF net inflows signaled strong institutional demand, even as Bitcoin remained well below its previous all-time high. Rasmussen said Bitwise expects prices to ultimately move higher, adding that the broader debasement trade is 'just getting started.'