US Institutions Prepare for Significant Increase in Bitcoin Holdings, According to Veteran from Wall Street
In a significant development for the cryptocurrency market, signs are pointing towards increased Bitcoin allocations from traditional finance (TradFi) institutions by the end of the year.
According to Wall Street veteran Jordi Visser, US financial institutions are expected to increase their Bitcoin price, with a focus on the fourth quarter of 2024, as part of their preparations for 2025. This prediction comes as a survey suggests that many firms are preparing for wider crypto use in their portfolios.
The survey, conducted by a joint Coinbase and EY-Parthenon initiative, found that 83% of respondents intend to increase their allocations, and 59% expect to put more than 5% of their assets under management into crypto or related products.
The execution of these Bitcoin allocations from TradFi depends on several moving parts. However, recent daily net inflows for Bitcoin ETFs have reached about $642 million on one trading day, indicating a steady source of demand for Bitcoin if these trends continue.
Spot Bitcoin ETFs have pulled heavy inflows this year, providing an easier on-ramp for institutions into the stock market today. Cumulative ETF net inflows since launch are roughly $57 billion, lifting total ETF assets to about $153 billion.
Jordi Visser anticipates demand for Bitcoin to pick up in Q4, with some portfolio managers making small moves and others shifting larger slices of their holdings into BTC. Late Q4 is the period to watch, as it is when institutions may move their Bitcoin allocations.
The US is also likely to launch a Strategic Bitcoin Reserve by the end of the year, further adding to corporate demand for Bitcoin. Public and private firms currently have Bitcoin valued at approximately $112 billion on their books.
It's important to note that institutional plans to invest in Bitcoin can be subject to change due to factors like regulation, market swings, and macro shocks. Bumps in Bitcoin investment can occur due to policy shifts, rates, or a sudden liquidity squeeze.
Despite these potential challenges, if institutions move as planned, Bitcoin could see meaningful support, with more allocation from TradFi adding to overall market appetite for the cryptocurrency. The editorial does not provide information about the featured image or chart.
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