Standard Chartered’s digital asset research head, Geoffrey Kendrick, suggests Bitcoin’s ambitious climb to $500K before Donald Trump’s presidency concludes hinges on a significant increase in long-term investments from state pension funds.

In a Tuesday research note, Kendrick pointed out that currently, state pension funds hold a minimal 1% share of Bitcoin ETF investments. He anticipates growth in this figure as broader institutional investment gains momentum.

The $500K Bitcoin Target

Kendrick’s analysis of Q4 13F filings reveals hedge funds as leading Bitcoin investors, with Brevan Howard notably acquiring 14,500 BTC equivalent in the quarter.

Major banks, including Goldman Sachs, have also increased their Bitcoin holdings. Sovereign wealth funds are entering the arena too, exemplified by Abu Dhabi’s state fund establishing a substantial 4,700 BTC-equivalent position via BlackRock’s ETF.

The anticipated revocation of SAB 121, which previously posed restrictions on banks holding digital assets, is expected to further fuel institutional adoption.

Moreover, Kendrick predicts increased Bitcoin exposure from sovereign wealth funds, encouraged by the growing Bitcoin reserves held by the U.S. government.

Reaching the $500K Bitcoin price target, according to Kendrick, necessitates wider institutional participation, particularly from state pension funds.

He argues that pension fund capital delivers stable, long-term investment, which can reduce Bitcoin’s price fluctuations and solidify its status as a mature institutional asset.

Bitcoin Adoption Trajectory in 2025

Looking ahead to Q1 2025, Kendrick foresees continued Bitcoin accumulation by banks and sovereign wealth funds.

As the Bitcoin market matures, a broader investor base is expected, driven by anticipated easing of regulatory constraints and increasing global acceptance, according to Kendrick.

The market’s evolution started with retail traders, transitioned to hedge fund dominance during the early ETF phase, and is now attracting sovereign entities.

State pension funds are anticipated to be the next significant entrants, Kendrick suggests. He also highlights the potential involvement of central banks, referencing the Czech National Bank’s consideration of allocating up to 5% of its €140 billion reserves to Bitcoin and the Swiss National Bank’s initial Bitcoin investment explorations.

With improved institutional accessibility and decreasing volatility, Kendrick predicts a shift towards optimal Bitcoin exposure in more portfolios, moving away from underweighted positions.

Following 2024’s substantial 499,000 BTC in spot ETF purchases and MicroStrategy’s 257,000 BTC accumulation, Kendrick forecasts even greater institutional demand in 2025.

The entry of state pension funds could be a pivotal moment, potentially transforming Bitcoin from an alternative asset into a fundamental component of diversified institutional investment strategies.

Current Bitcoin Price Update

Bitcoin’s price faced headwinds on Tuesday, declining approximately 2% over the last 24 hours to a trading price of ₹$94,152.43.

Bitcoin’s price range over the past 24 hours has fluctuated between a high of $96,730 and a low of $94,080.29.

For roughly two weeks, Bitcoin’s price has remained within a consolidation range of $94,000 to $100,000.

The global cryptocurrency market capitalization has decreased to $3.09 trillion, representing a 2.81% drop in the last 24 hours.

Bitcoin’s market dominance has increased to 60.44%, a 0.79% rise from the previous day.

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Source: invezz.com