On December 5th, a pivotal moment in the world of cryptocurrency occurred when Bitcoin remarkably surged past the $100,000 mark for the very first time during intraday tradingThis historic milestone underscores the cryptocurrency's meteoric rise, particularly striking when juxtaposed against its trading price of approximately $27,000 in April of the previous yearGeoffrey Kendrick, Standard Chartered's Head of Emerging Markets FX Research and Cryptocurrency Research, had astutely predicted this climb to $100,000 by the end of this year—an insight that has now proven accurateHis bullish outlook does not end here; he anticipates Bitcoin could soar to around $200,000 by the end of next year, propelled by potential further investments from institutional investors.

Kendrick attributes the impressive leap to the robust support from institutional investorsIn fact, throughout 2024, it is anticipated that the influx of investment capital into Bitcoin will be substantially dominated by institutional players

Standard Chartered forecasts that this trend will persist into 2025, reinforcing the projection that Bitcoin could reach the ambitious $200,000 target by thenAdditionally, the involvement of U.Spension funds and sovereign wealth funds in Bitcoin could potentially elevate Kendrick’s optimism regarding future price increases.

To delve deeper into the source of this institutional capital flow, one notable example is the substantial investment made by listed Bitcoin exchange-traded funds (ETFs) on U.SexchangesMoreover, significant purchases have been made by large holders of Bitcoin, such as MicroStrategy, a software firm viewed as an indirect vehicle for Bitcoin investmentMicroStrategy's acquisition strategy has seen them amass a staggering net purchase of approximately 683,000 Bitcoins this year alone, with a mere few weeks contributing to an eye-opening influx of 245,000 Bitcoins.

This growing tide of investment undoubtedly played an instrumental role in Bitcoin's recent surge past the $100,000 benchmark

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As we speculate about the future trajectory of Bitcoin, it becomes crucial to consider Kendrick's insightsHis report anticipates that institutional capital inflow will maintain or even exceed the current pace into 2025. Notably, MicroStrategy is on a path to fulfill its ambitious plan announced at the end of October to raise $42 billion over three years for Bitcoin purchases—implying a potential purchasing scale for 2025 that meets or surpasses 2024’s levels.

While analyzing the evolution of Bitcoin ETFs in the U.S., Standard Chartered’s research indicates an observed trend among pension funds that lean towards a more cautious approach, as reflected in their 13F filings with the Securities and Exchange Commission (SEC). Here, pension fund holdings constitute a mere 1% of shares across nine new Bitcoin ETFsHowever, as the changing political landscape may facilitate a greater regulatory acceptance of digital asset investments, Standard Chartered estimates a potential increase in pension funds’ participation in Bitcoin ETFs by 2025. Even if only a modest portion of the total $40 trillion held by U.S

pension funds is allocated to Bitcoin, it could drive Bitcoin prices significantly higher.

In this shifting landscape of digital currency investment, Standard Chartered reaffirms its bullish stance on achieving a Bitcoin target price of roughly $200,000 by the end of 2025. Should U.Spension funds, global sovereign wealth funds (SWFs), or potentially emerging U.Sstrategic reserve funds expedite their adoption of Bitcoin, optimism regarding Bitcoin's price performance would be amplified.

Kendrick's report also addresses the previously mentioned prospect of a U.Sgovernment-established Bitcoin strategic reserve fundWhile he believes the probability of such a fund emerging is low, the ramifications of its occurrence could be vastNot only would it create a new buyer in the relatively small asset class of Bitcoin, but it may also provide cover for other SWFs considering similar purchases or disclose their existing investments in Bitcoin.

In July of this year, Kendrick highlighted that the U.S

government possesses around 210,000 Bitcoins, representing about 1% of the total supplyGiven the scale of global foreign exchange reserves and Bitcoin’s relatively modest total market capitalization, Standard Chartered considers the formation of a strategic reserve fund to be a significant potential driver for upward price movement.

In the current global financial landscape, the sheer magnitude of foreign exchange reserves presents an incredible opportunityShould reserve managers allocate even just 1% of their vast holdings to Bitcoin, the resultant figures would be staggering due to the enormous base of reservesConsequently, this capital influx could dramatically elevate the Bitcoin market, potentially leading to a significant increase in its price.

Amidst this evolving narrative surrounding Bitcoin, it is evident that institutional involvement, combined with regulatory shifts, paints a promising picture for the future of this cryptocurrency