Bitwise: Bitcoin ETFs growing 20 times faster than gold ETFs
JAKARTA – Crypto asset manager Bitwise projects that capital inflows into Bitcoin could reach USD 120 billion by the end of 2025 and surge to USD 300 billion in 2026, totalling USD 420 billion over the two years, according to its latest report titled Forecasting Institutional Flows to Bitcoin in 2025/2026.
The main driver of this anticipated growth is the increasing participation of major financial institutions, sovereign wealth funds, publicly listed companies, and most notably, the surge in demand for US-listed spot Bitcoin Exchange Traded Funds (ETFs).
Within just 12 months of their launch, spot Bitcoin ETFs have attracted USD 36.2 billion in net inflows and achieved assets under management (AUM) of USD 125 billion—representing growth 20 times faster than that of the SPDR Gold Shares (GLD) ETF.
Juan Leon, Head of Investment Strategy at Bitwise, alongside researchers Guillaume Girard and Will Owens, outlined multiple funding flow scenarios based on varying levels of institutional allocation to Bitcoin, according to Cointelegraph (26/5).
In the base-case scenario, countries allocate 5% of their gold reserves to Bitcoin, generating inflows of USD 161.7 billion. Combined with US state adoption and allocations from wealth managers, total inflows could reach USD 420 billion, absorbing nearly 20% of the total Bitcoin supply.
Support from large financial institutions is already emerging. Although in 2024, around USD 35 billion from clients of Morgan Stanley and Goldman Sachs remained sidelined due to compliance policies, Bitwise believes the track record of Bitcoin ETFs will eventually pave the way for these funds to enter the market.
Jurrien Timmer, Director of Global Macro at Fidelity, noted that Bitcoin crossing the USD 100,000 threshold signals a new phase. He added that Bitcoin is beginning to rival gold in terms of its Sharpe ratio, highlighting the growing similarity between the two as stores of value.
The Sharpe ratio is a measure used to assess investment performance relative to risk. It indicates how much excess return an investor receives for the extra volatility endured by holding a riskier asset.
As of now, approximately 1.7 million BTC is held by public entities such as governments and major corporations. These include the United States (207,189 BTC), China (194,000 BTC), and the United Kingdom (61,000 BTC).
Corporates like MicroStrategy and Tesla continue to increase their holdings as part of asset diversification strategies and to hedge against inflation.
With over 94% of the total Bitcoin supply already mined as of May 2025 (19,868,987 BTC), its scarcity further enhances its appeal among institutional investors seeking alternatives to fiat currencies and gold. (EF/ZH)