Bitcoin's 26% Year-to-Date Gain Boosts Institutional Holders' Wealth

Bitcoin's recent surge to a peak of over $118,000 has significantly boosted the wealth of its major institutional holders. Companies and countries with large Bitcoin investments are seeing substantial increases in the value of their holdings. However, there appears to be little interest in cashing in on these profits.

Strategy, a company that transitioned from technology to cryptocurrencies, possesses close to 600,000 Bitcoins. This position has yielded an unrealized gain of approximately $28 billion, with the company’s total investment surpassing $42 billion. Strategy is the third-largest Bitcoin owner, trailing only Satoshi Nakamoto and BlackRock. Although Strategy holds Bitcoins directly on their balance sheet, BlackRock secures them for their clients. The iShares Bitcoin Trust by BlackRock started its operations in January of last year. Michael Saylor, the co-founder and chairman of Strategy, consistently emphasizes their policy of holding rather than selling.

Japanese firm Metaplanet has been actively purchasing Bitcoin since 2024 and now holds around 15,555 Bitcoins. Their current valuation stands at approximately $1.83 billion, with an unrealized profit of $284 million. Meanwhile, El Salvador, which adopted Bitcoin as legal tender, owns 6,234 Bitcoins. These assets have surged in value to about $733 million, recovering significantly from a dip in 2022.

The price hike in Bitcoin also benefits smaller firms. Semler Scientific mirrors Strategy’s approach and currently holds 4,636 Bitcoins, realizing nearly $160 million in unrealized profits. Similarly, Blockchain Group from France acquired 900 Bitcoins, generating about $30.5 million in gains. Despite the large-scale profits, widespread selling has not ensued among holders, who are often described as “maximalists”—investors viewing Bitcoin as a long-term asset. A critical moment could arrive by July 12, where a single sell-off by a key player may instigate a broader market shift.

Bitcoin's year-to-date gain stands at 26%, with its 12-month return exceeding 100%. This momentum has reignited interest in the cryptocurrency sector, which had previously struggled to gain traction. The cryptocurrency's price momentum is putting it on track for further gains, with a technical analyst predicting a 14% rally by year-end. On Friday, Bitcoin hovered around $117,000, continuing its upward trajectory.

Several drivers have contributed to Bitcoin's rally. Enormous institutional flows have played a significant role, with BlackRock’s iShares Bitcoin Trust surpassing the $80 billion mark. This influx of institutional investment has been a key factor in Bitcoin's price surge. Additionally, strong regulatory momentum has provided a supportive environment for the cryptocurrency. The House of Representatives declared the week of July 14 as "Crypto Week," during which lawmakers will consider the CLARITY Act and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. If these bills pass, it would mark a significant milestone for the crypto industry, unleashing institutional demand that had been bottled up for years.

Bitcoin has also held up well during times of geopolitical turmoil, reinforcing its "safe haven" narrative. This resilience has contributed to its recent price surge, with analysts predicting further gains in the coming months. Nic Puckrin, founder of Coin Bureau, cited another driver: bitcoin has actually held up really well during times of geopolitical turmoil, so the “safe haven” narrative is playing out. “The new ATH isn't a surprise — what’s somewhat surprising is that we didn’t get here a little bit sooner,” Puckrin said. “This delay is mostly thanks to the uncertainty around tariffs, and it appears to have pushed the cycle out further than previous ones. As such, I don’t expect this to be the end of the cycle; there will most likely be another correction, before a final push to around $150,000 in Q1 or Q2 next year.”

Other winners from this rally include crypto-adjacent stocks, many of which are also riding the Bitcoin wave. Bitcoin miners MARA Holdings and Riot Platforms, as well as Strategy, have seen significant gains. The rally has also ignited substantial gains across a range of altcoins, with memecoins surging by more than 30%. This surge is attributed to upcoming legislative developments and the overall bullish sentiment in the crypto market.

The latest Bitcoin surge sheds light on how institutional investments might shape cryptocurrency market dynamics. Their preference for holding Bitcoin can enhance market trust and stability while their increasing diversification and earnings reinforce cryptocurrency’s legitimacy in finance.