Bitcoin Surges 20% as Institutional Flows Hit $5.3 Billion

Bitcoin (BTC) is on track to reach a new all-time high, with investment flows becoming the primary driver of the market, according to Standard Chartered. The investment bank noted that U.S. spot bitcoin exchange-traded funds (ETFs) have attracted $5.3 billion in inflows over the past three weeks. Adjusting for hedge fund basis trades, the net real flow is estimated to be over $4 billion. The basis trade is a strategy that leverages the price difference between the spot price of bitcoin and its futures market price.

MicroStrategy (MSTR) has increased its holdings to 555,450 BTC, which represents 2.6% of the total future supply, capped at 21 million BTC. The company's plan to raise $84 billion to purchase more of the world's largest cryptocurrency could increase its holdings to over 6%, according to Geoff Kendrick, head of digital assets research at Standard Chartered.

Next week’s 13F filings may reveal further institutional adoption, Standard Chartered said. Abu Dhabi’s sovereign fund already holds BlackRock's bitcoin ETF (IBIT), and both the Swiss National Bank and Norges Bank have disclosed positions in MSTR. New Hampshire passed a Strategic Bitcoin Reserve bill this week, the first U.S. state to do so, which signals growing policy alignment, the report added.

Given these developments, a second-quarter bitcoin target of $120,000 may be too conservative, the bank said, citing its previous forecast. The bank has a year-end bitcoin price target of $200,000. The world's largest cryptocurrency was trading around $101,000 at the time of publication.