News 
May 27, 2025 
5 min. 
Bitwise forecasts that institutional investment in Bitcoin could surge to $426.9 billion by 2026, signaling a major shift in how traditional finance engages with digital assets.
According to the firm’s latest analysis, this wave of capital would represent the acquisition of around 4.2 million BTC—roughly 20% of Bitcoin’s total supply. Bitwise suggests that sovereign entities, multinational corporations, and large-scale asset managers are likely to drive this significant accumulation.
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Institutional Bitcoin Adoption Accelerates Amid Supply Strain and Regulatory Uncertainty
A recent report from Bitwise Investments highlights a significant rise in institutional adoption of Bitcoin, suggesting a fundamental shift in how governments, corporations, and asset managers are approaching digital assets.
El Salvador currently holds 6,133 BTC, valued at approximately $521 million. China, despite its official ban on cryptocurrency trading, possesses 190,000 BTC worth nearly $16.1 billion. The United States leads with 198,012 BTC, totaling around $16.8 billion in value.
Source: Bitwise Investments
Major financial institutions have been increasing their exposure to Bitcoin since 2024. Firms like Morgan Stanley and Fidelity have taken active roles in the space. BlackRock’s Bitcoin ETF (IBIT) now manages $71 billion in BTC, while MicroStrategy, the largest institutional holder, has grown its holdings to 576,230 BTC. This equates to about $63.7 billion and represents 2.74% of Bitcoin’s total supply.
Corporate newcomers, such as Metaplanet, are also beginning to incorporate Bitcoin into their balance sheets. In the U.S., state-level entities are participating too. Texas’s teacher retirement system has invested $500 million in Bitcoin ETFs. Sovereign wealth funds, including Norway’s Norges Bank and the Abu Dhabi Investment Authority, are also exploring Bitcoin allocations.
Source: Bitwise Investments
Surging Demand Meets Shrinking Supply
Bitwise estimates that institutional players could absorb 4.2 million BTC over the next few years, roughly 20.3% of the total supply. However, following the 2024 Bitcoin halving, only about 164,250 new BTC are issued annually under the reduced 3.125 BTC block reward. This growing demand against limited new supply is creating significant pressure on the market.
Bitcoin’s strong rally in May 2025, which pushed the cryptocurrency to a new all-time high, may be partially attributed to this tightening supply. Analysts and on-chain data point to the potential for Bitcoin to reach $200,000 during the current market cycle.
Source: Bitwise Investments
Opportunities Come with Risks
While the institutional surge is fueling bullish sentiment, it also introduces new risks. A concentrated supply among large entities could lead to heightened market volatility if major holders sell off rapidly. Regulatory pressures are increasing as well, with the U.S. Securities and Exchange Commission (SEC) stepping up its oversight of Bitcoin ETFs. This has raised concerns about the long-term stability of institutional capital flows.
Macro conditions also remain a factor. With the Federal Reserve expected to maintain current interest rates through June 2025, appetite for high-risk assets like Bitcoin could slow temporarily.
