Bitcoin (BTC) demand from diverse investors—including publicly listed companies

Spot Bitcoin ETFs have already surpassed gold ETFs in early growth, with projections of $100 billion in annual inflows by 2027.

Publicly listed companies and nation-states are spearheading substantial capital inflows into Bitcoin (BTC) in 2024, according to crypto index fund management firm Bitwise.

According to its analysis of institutional investor activity, Bitwise anticipates that publicly listed companies alone could channel an additional $120 billion into Bitcoin by the end of 2025.

Furthermore, Bitwise projects an influx of $300 billion in 2026 as government bodies, exchange-traded funds (ETFs), and wealth management platforms collectively expand their Bitcoin allocations.

In 2024, US Bitcoin ETFs realized net inflows of $36.2 billion, outpacing the early success of SPDR gold Shares (GLD), which transformed gold investing.

Bitcoin ETFs reached $125 billion in assets under management (AUM) within 12 months—20 times faster than GLD—projecting Bitcoin to outperform gold significantly, with an annualized inflow of $36.2 billion.

In contrast, GLD, the world’s largest gold ETF, achieved $100 billion in AUM after seven years, and at its peak, generated $35 billion in annual inflows.

However, despite this surge, Bitwise estimates that $35 billion of Bitcoin demand remained untapped due to risk-averse compliance policies at major corporations.

Institutions like Morgan Stanley and Goldman Sachs, managing $60 trillion in client assets, typically require a multi-year track record before investing in cryptocurrencies.

Moreover, these firms cannot easily adjust their capital allocations to quickly capitalize on emerging trends like Bitcoin ETFs.

Nevertheless, Bitwise anticipates that as BTC ETF legitimacy grows, so too will the ease with which these institutions can allocate capital to the asset.

“We believe that by 2025, at least some of these institutions will adjust their internal policies to allow for allocations to Bitcoin ETFs,” said Bitwise.

Jurrien Timmer, Director of Global Macro at Fidelity, also noted that Bitcoin trading above $100,000 signals its potential to take over gold’s role as a store of value.

His analysis also pointed to the recent convergence of Bitcoin and gold’s Sharpe ratios, suggesting that both assets are becoming increasingly comparable in terms of risk-adjusted returns.

“The Sharpe ratio on gold used to be about 0.5, while the Sharpe ratio on Bitcoin was closer to 1.5, But over the last six months, both assets have converged to a Sharpe ratio of about 1,” said Timmer.

Public and private companies, in addition to sovereign nations, are increasingly viewing Bitcoin as a reserve asset.

As of August 1, companies listed on public exchanges, such as Tesla and MicroStrategy, had bought and held around 1,146,128 BTC, valued at $125 billion at current prices.

This represents 5.8% of the total Bitcoin supply and is a significant portion of the cryptocurrency’s circulating supply.

Sovereign nations collectively held 529,705 BTC, valued at $57.8 billion, with the United States (207,189 BTC), China (194,000 BTC), and the United Kingdom (61,000 BTC) leading the way.

Together, these companies and nations have absorbed a considerable amount of Bitcoin, which could have implications for the cryptocurrency’s price movements in the coming years.

According to Juan Leon, Senior investment strategist at Bitwise, and colleagues Guillaume Girard, UXTO research lead, and Will Owens, research analyst, there are a few bear, base, and bull case scenarios to consider.

In the bear case, nation-states reallocated just 1% of their gold reserves to Bitcoin, driving $32.3 billion in inflows (323,000 BTC or 1.54% of supply).

Multiple US states created BTC reserves at 10%, adding $6.5 billion, while wealth management platforms allocated 0.1% of assets ($60 billion). Public companies contributed another $58.9 billion, bringing the total to over $150 billion.

The base case envisions a 5% nation-state allocation, generating $161.7 billion (1,617,000 BTC or 7.7% of supply). US states raised their adoption to 30% ($19.6 billion), wealth platforms allocated 0.5% ($300 billion), and public companies doubled their holdings to $117.8 billion.

This scenario aligns with Bitwise’s forecast of $120 billion by 2025 and $300 billion by 2026, amounting to 20.32% of Bitcoin’s supply.

In the bull