Published: February 19th, 2025
Despite a cooling price trend for Bitcoin in February, one analyst is betting that big money institutions will keep BTC’s bull run going for the foreseeable future.
A note published this week by global investment firm Bernstein suggests that crypto traders should get ready for the next rally, both in the value of the coin and the financial instruments pegged to it.
Bitcoin’s year-long uptrend kicked off when the US Securities and Exchange Commission (SEC) gave its assent to Bitcoin spot exchange-traded funds (ETFs) in the US last January. The election of pro-crypto President Donald Trump has added to the momentum, with more institutional cash expected to flow into BTC in the coming months.
‘Overlapping adoption by corporations, institutional investors, banks, and now sovereign funds is setting up Bitcoin to challenge gold as a safe haven investment.’
Bitcoin’s price has surged to new highs since the SEC ended its longstanding objection to Bitcoin ETFs and surrendered. With Donald Trump’s election win last November, the world’s number one cryptocurrency broke through the long-awaited USD 100,000 mark.
At time of writing, data from CoinGecko had BTC trading at $96,043, a price gain of more than 85% over the previous 12 months.
Bernstein’s note to investors highlighted a move by Abu Dhabi’s sovereign wealth fund to invest in Bitcoin ETFs as key event. A recent SEC filing by the Mubadala Investment Company, which handles investments in the United Arab Emirates, had committed $435 million to shares of BlackRock’s spot Bitcoin ETF.
Investors who want to avoid direct exposure to Bitcoin and Ethereum’s historic volatility value ETFs for their arms-length nature. They operate as funds that track the price of crypto assets. As such trading on American stock exchanges and are subject to traditional investment rules and governance.
Bernstein analysts wrote that large institutional investors including Citadel Advisors, Morgan Stanley, and Jane Street Group had all invested hundreds of millions of dollars in crypto ETFs.
Bernstein analyst have a pro-Bitcoin bent, and predicted in 2024 that BTC’s price would would hit $200,000 by the end of this year.
In December 2024, London wealth management firm deVere said the UK government should consider building up a strategic reserve of Bitcoin as an inflation hedge, providing a mechanism to give Westminster more options when it comes to currency markets.
In a statement on the company website, deVere Group CEO Nigel Green said ‘the time has come for Britain to take the idea of a strategic Bitcoin reserve seriously. His call was prompted by signals that the USA is considering similar moves, with Wyoming Senator Cynthia Lummis’s recent proposal that America’s Treasury and Federal Reserve should work together and gather one million Bitcoins over the next five years to form a strategic reserve.
The idea would position BTC as a major inflation hedge and a new tool for sustaining America’s leading position in the global financial system.
'As the race for financial innovation and sovereignty heats up, the UK can’t be seen as a laggard,’ Green writes. Bitcoin's enforced scarcity, decentralized nature, and relative immunity to inflation pressures has already degraded the legitimacy of fiat currencies. Keeping a government Bitcoin hoard could strengthen the UK’s fiscal strategy and provide a hedge against currency devaluation and market volatility.
Though gold is the established sovereign wealth asset for most governments and central banks, Bitcoin has the advantage of being easily transferable, Green notes. Because its inherently digital, more and more individuals and institutions are adopting it as a store of value.
'As Bitcoin’s price continues to rise, the arguments against its inclusion in national reserves is getting weaker by the day. With the asset on its way to UD 100,000, Green believes a strategic Bitcoin reserve would re-establish Britain as a financial innovator, ‘ensuring we keep our status as a global financial center’.
The G20’s fiscal watchdog had a different message in July when it warned of wider systemic risk if the activities of crypto firms weren't reined in.
The Financial Stability Board (FSB) said that the continuing fallout from recent crypto catastrophes demands that financial regulators obtain greater oversight of the industry. The agency’s newly published global regulatory framework for crypto assets was strongly influenced by last year’s crypto failures, specifically the collapse of FTX and Terra.
To grapple with those risks, the FSB listed nine core recommendations for financial regulators as they attempt to control how crypto companies and markets operate. The agency also revised its guidance on regulatory rules for stablecoins.
The recommendations, which incorporate industry and investor feedback gathered during a public consultation on the topic, said there must be greater cross-border collaboration between national and international agencies, mandatory disclosures for traders and investment firms, and more stringent governance for crypto issuers.
The FSB said its suggestions had become ‘more robust’ in the aftermath of recent crypto events and now incorporate a push for stronger safeguarding of client assets, as well as measures to mitigate conflicts of interest.
‘The large-scale failures we’ve seen over the last 18 months spotlight how volatile crypto assets can be and point to structural vulnerabilities that could damage investors large and small,’ the Zurich-based agency said in a statement. ‘They also demonstrate how quickly failure in one part of the crypto-asset ecosystem can turn into contagion and contaminate other parts.’
The agency added that it expects more spillover of crises to occur as the crypto and traditional finance worlds become more intertwined.
Despite FSB warnings, the UK signaled its intention to normalize crypto activity in July, when the country’s new Financial Services and Markets Act 2023 officially became the law of the land. The bill recognized crypto trading as a regulated and legitimate financial services activity. The UK reform bill, which was given Royal Assent by King Charles, was described in a Westminster press release as having the potential to give Britain's economy ‘a rocket boost.’
While traditionalists may look at the wave of crypto enforcements actions taking place across the globe with distress, many experts believe that well-regulated markets for digital assets could open the door to more widespread adoption.
Under the UK’s new law, cryptocurrency trading can now be subject to rules and regulations designed to protect investors, levelling the playing field by adding transparency, standard definitions, and risk mitigation to crypto trades. The amended Act defined digital assets as ‘cryptographically secured digital representations of contractual rights or underlying value,’ and labels them as regulated financial products, investments, or instruments.
