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Institutional adoption of bitcoin (BTC-USD) is growing, with sovereign wealth funds and pension funds now actively allocating capital into the world’s largest cryptocurrency.
Speaking on Yahoo Finance Future Focus, Zodia Markets Ireland chair Michael Walsh highlighted the shift in institutional sentiment towards bitcoin (BTC-USD) as a portfolio diversifier and hedge against macroeconomic shocks.
Walsh revealed that Zodia Markets recently facilitated the first-ever bitcoin trade for a UK pension fund, which allocated 3% of its portfolio to the digital asset.
“In addition to that, if you look at the growth of spot bitcoin exchange-traded funds (ETFs) in the US, the most recent SEC filings will show you that 1% of that money is pension fund money," Walsh said.
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“Now, 1% of a $100bn (£78.88bn) market might not seem significant, but it represents over a billion dollars with substantial room for growth.”
Beyond pension funds, sovereign wealth funds and even central banks are showing increased interest in bitcoin. The Czech central bank governor recently said that bitcoin could be considered as part of their reserves. Meanwhile, the US holds a strategic bitcoin reserve consisting of seized assets, suggesting an evolving government approach to the asset class.
Bitcoin’s path to $700,000, speculation or data-driven?
The recent bullish projection from BlackRock (BLK) CEO Larry Fink that bitcoin could reach $700,000 (£552,184) has fueled further debate. At this year's World Economic Forum's Annual Meeting in Davos, Switzerland, Fink highlighted small asset manager allocations and bitcoin’s role as a hedge against fiat currency debasement as key factors driving this projection.
When asked if this target is realistic, Walsh acknowledged that bitcoin remains a speculative asset but pointed to compelling data that suggests such a price is not out of reach.
“Last year, $100,000 sounded outrageous, yet here we are. If you consider that the total global invested wealth is around $450tn, according to UBS (UBS), and if just 1% of that was allocated to bitcoin, that would represent a market cap of $4.5tn. Given bitcoin’s fixed supply of 21 million, do the math,” Walsh said.
Pro-crypto policies under the Trump administration
Institutional investors have long cited regulatory uncertainty as a major barrier to bitcoin adoption. However, the Trump administration’s pro-crypto stance is shifting that narrative.
Walsh pointed out that a key regulatory hurdle, SAB 121 — a rule affecting how banks hold crypto assets — has been rescinded. Additionally, Trump signed an executive order declaring that the US will aim to become the global leader in digital assets.