Bitcoin is in the early stages of institutional adoption, with only 0.01% of listed companies worldwide currently owning BTC, according to Chinese research firm OKG Research.
However, the research group estimates that up to $2.28 trillion in new funds could flow into Bitcoin over the next year, potentially pushing its price to around $200,000. This aligns with estimates from financial institutions such as Bernstein, BCA Research and Standard Chartered Bank.
Bitcoin’s 40% gain in the past month has increased investors’ risk sensitivity. OKG Research believes that this volatility is the result of short-term events rather than a fundamental change in macroeconomic conditions, with liquidity dynamics continuing to play a dominant role.
Bitcoin’s trajectory remains closely tied to global liquidity trends. The Fed’s decision to cut interest rates by 50 basis points in September 2024, its first rate cut since 2020, has revived risk assets. OKG Research highlighted Bitcoin’s dual role as both a hedge against inflation and a vehicle for speculative growth, particularly in an environment of increased liquidity.
As the Fed ends its long cycle of rate hikes, liquidity injections are expanding the potential of riskier assets like Bitcoin. This environment is creating opportunities for investors looking for alternatives to hedge against economic uncertainty and inflationary pressures, according to OKG Research.
The launch of Bitcoin spot ETFs in January 2024 has been a major driver of institutional interest. OKG Research reported that global Bitcoin spot ETFs currently account for 5.63% of Bitcoin’s total supply, surpassing the critical 5% threshold generally seen as significant in financial markets.
Despite this progress, current institutional involvement is still in its infancy. The research suggests that Bitcoin adoption is in an “elite experimental phase” and has tremendous untapped potential as more companies and institutions explore exposure to BTC.
*This is not investment advice.
