Bitwise Forecasts 4.2 M Bitcoin Scoop as Institutional Demand Rewrites Portfolio Playbooks

A new report from crypto asset management firm, Bitwise, claims that 2025 is the year Bitcoin will be widely adopted by institutions, seeing the OG cryptocurrency transition from being a “speculative asset to a strategic imperative”.

Capital inflows into Bitcoin from institutional investors could top US$120 billion (AUD$183b) by the end of 2025, with a further US$300 billion (AUD$460b) forecast to be added during 2026, according to the report, titled ‘Forecasting Institutional Bitcoin Flows 2026/2026: Exploring the Game Theory of Hyperbitcoinization’. 

If this prediction plays out it would mean by the end of next year institutional investors will have scooped up around 4.2 million BTC, valued at an eye-watering US$420 billion (AUD$643b).

The report sees this enormous flow of capital into Bitcoin being driven by a broad range of large investors including national governments, publicly-listed companies, Bitcoin ETFs and sovereign wealth funds.

Related: Bitcoin Hits $111k, Sets New All-Time High, But Analysts Say It Ain’t Done Yet

Prediction Based on Several Bullish Trends

The report argues Bitcoin is in the process of being legitimised, both by a new wave of crypto regulation but also by the success of the Bitcoin spot ETFs.

In 2024 alone, the Bitcoin spot ETFs collectively saw US$36.2 billion (AUD$55.4b) of net inflows and they now have over US$125 billion (AUD$191b) assets under management (AUM). Collectively the Bitcoin spot ETFs have already surpassed the AUM of gold ETFs, and they’ve done this in just over 12 months — it took the gold ETFs over 20 years to reach their current AUM.

While Bitcoin ETF inflows are off to a slower start in Year 2, if they follow a similar pattern to GLD, net flows should triple by the fourth year.

Bitwise report

“That would imply $100 billion per year of net inflows into Bitcoin ETFs by 2027,” the report states.

Combined with the regulatory changes currently underway, the prevalent mood emerging among institutional investors is that Bitcoin is a must-hold asset, according to Bitwise.

The report goes on to say that “the current pipeline of U.S. federal and state bills, plus the move to permanently hold existing government holdings, signals an inflection point: Bitcoin is transitioning from a tolerated seized asset to a formally recognized strategic reserve asset.”

Near‑term odds of legislative passage are gaining momentum, which in turn is already influencing institutional asset‑allocation models, portfolio hedging assumptions, and expected long‑run supply distribution.

Bitwise report

The report also highlights direct investment in Bitcoin by publicly-listed companies as an important driver, pointing to examples such as Michael Saylor’s Strategy. It forecasts that by the end of 2026, one million BTC will be bought up by companies implementing similar treasury management strategies.

Regulatory reform, both globally and within the US, is also forecast to drive new demand from governments — the report predicts at least four new nations and five US states will establish strategic Bitcoin reserves before the end of 2026.

The report also notes that so far the growth in institutional investment in Bitcoin has taken place while around US$35 billion (AU$53.6b) in institutional capital has been sidelined due to stringent risk management policies of major wirehouses, such as Morgan Stanley and Wells Fargo. Bitwise expects these firms to green-light investment in Bitcoin this year, unlocking further capital inflows.

US$420b Base Case, Bull Case Is Even Higher

The report’s headline prediction of US$420 billion flowing into Bitcoin over the next 18 months is the base case. This scenario is based on nation states reallocating 5% of their gold holdings to Bitcoin, publicly listed companies doubling their holdings and asset managers committing 0.5% of their portfolios to the cryptocurrency. 

But the bull case is even higher.

Related: Saylor’s New BTC Buying Strategy, Metaplanet Doubles and Happy Bitcoin Pizza Day

Should the race to acquire BTC get even spicier, the report claims we could see as much as US$600 billion (AUD$918b) worth of institutional money pouring into BTC by the end of 2026. This is based on a gold reallocation of 10% by nation-states, a quadrupling of BTC held by publicly listed companies and a 1% BTC allocation by wealth managers.