Bitcoin Inflows Projected to Reach $120 Billion by 2025 Driven by Institutional Investors

Bitcoin is projected to see significant capital inflows in the coming years, driven by a diverse range of investors including publicly listed companies, sovereign wealth funds, exchange-traded funds (ETFs), and nation-states. According to Bitwise, a crypto index fund management firm, inflows to Bitcoin could reach $120 billion by the end of 2025, with an additional $300 billion anticipated in 2026. This projection underscores the growing confidence in Bitcoin's long-term value as a store of wealth and a hedge against inflation and fiat currency debasement.

Bitwise's report, “Forecasting Institutional Flows to Bitcoin in 2025/2026,” highlights that US spot Bitcoin ETFs recorded $36.2 billion in net inflows in 2024. This growth surpassed the early success of SPDR gold Shares (GLD), which revolutionized 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 inflows potentially tripling to $100 billion annually by 2027.

Despite this surge, $35 billion in Bitcoin demand remained sidelined in 2024 due to risk-averse compliance policies at major corporations. These firms require multi-year track records, but growing BTC ETF legitimacy is expected to unlock this capital. Jurrien Timmer, Director of Global Macro at Fidelity, remarked 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.

In addition to ETFs and wealth management firms, Bitcoin’s appeal as a reserve asset is rising among the public, private companies and sovereign nations. Companies with Bitcoin on the books currently hold around 1,146,128 BTC, worth $125 billion, accounting for 5.8% of BTC’s total supply. Sovereign nations collectively hold 529,705 BTC ($57.8 billion), with the United States, China, and the United Kingdom leading the pack.

Bitwise Senior investment strategist Juan Leon, UXTO research lead Guillaume Girard and research analyst Will Owens expect a continued wealth allocation to BTC, and outlined bear, base, and bull case scenarios. In the bear case, nation-states reallocated just 1% of their gold reserves to Bitcoin, driving $32.3 billion in inflows. Multiple US states created BTC reserves at 10%, adding $6.5 billion, while wealth management platforms allocated 0.1% of assets. Public companies contributed another $58.9 billion, bringing the total inflows to over $150 billion.

The base case envisions a 5% nation-state reallocation, generating $161.7 billion. US states raised their adoption to 30%, wealth platforms allocated 0.5%, 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, capturing 20.32% of Bitcoin’s supply.

In the bull case, a 10% nation-state swap of gold to Bitcoin drives $323.4 billion in inflows. US state adoption rises to 70%, wealth platforms allocate 1%, and public companies quadruple their holdings to $235.6 billion. Altogether, these inflows could exceed $426.9 billion, absorbing 4,269,000 BTC. The acceleration of institutional investor and government interest in BTC underscores growing confidence in Bitcoin’s long-term value. With 94.6% of its supply already mined, Bitcoin is increasingly being viewed as a hedge against inflation and fiat currency debasement.