Bitcoin Inflows Could Surge to $420 Billion by 2026, Driven by Institutional and Sovereign Demand
The demand for Bitcoin is rapidly expanding beyond retail investors, fueled by a diverse mix of institutional participants—including publicly listed corporations establishing Bitcoin treasuries, sovereign wealth funds, spot Bitcoin exchange-traded funds (ETFs), and even national governments. This trend is expected to generate massive capital inflows into the asset in the coming years. According to Bitwise Asset Management, a leading crypto index fund provider, inflows into Bitcoin could reach $120 billion by the end of 2025, with an additional $300 billion anticipated in 2026.
In its report titled Forecasting Institutional Flows to Bitcoin in 2025/2026, Bitwise outlines the explosive growth of U.S.-listed spot Bitcoin ETFs, which recorded a remarkable $36.2 billion in net inflows in 2024. This growth surpasses the early momentum of the SPDR Gold Shares (GLD) ETF, which once transformed gold investing. Notably, Bitcoin ETFs achieved $125 billion in assets under management (AUM) within just one year—20 times faster than GLD. Bitwise projects that if this trajectory continues, Bitcoin ETF inflows could potentially triple to $100 billion annually by 2027, positioning Bitcoin to outperform gold as a leading alternative asset.
However, despite the strong momentum, a significant portion of capital—estimated at $35 billion—remained on the sidelines in 2024. This was largely due to conservative compliance policies from major financial institutions like Morgan Stanley and Goldman Sachs, which collectively manage around $60 trillion in client assets. These institutions typically require multi-year performance histories before onboarding new asset classes, but the growing legitimacy and adoption of Bitcoin ETFs could soon unlock this capital.
Jurrien Timmer, Director of Global Macro at Fidelity Investments, highlighted Bitcoin’s growing stature by noting that a sustained price above $100,000 could cement its status as a digital store of value, rivaling gold. His analysis also revealed a convergence in the Sharpe ratios of Bitcoin and gold, suggesting the two assets are becoming increasingly similar in terms of risk-adjusted returns—a key metric for institutional investors.
Bull, Bear, and Base Case Scenarios for Bitcoin Allocation
Bitwise’s report also examines potential future allocation scenarios across institutional categories, including sovereign nations, public and private corporations, U.S. states, and wealth management platforms. As of now, companies hold approximately 1,146,128 BTC (worth around $125 billion), which represents 5.8% of Bitcoin’s total supply. Sovereign nations collectively hold 529,705 BTC (valued at $57.8 billion), led by the United States (207,189 BTC), China (194,000 BTC), and the United Kingdom (61,000 BTC).
Bitwise senior investment strategist Juan Leon, UTXO research lead Guillaume Girard, and research analyst Will Owens presented three scenarios: bear, base, and bull cases for Bitcoin adoption.
Bear Case: Nation-states allocate just 1% of their gold reserves to Bitcoin, resulting in $32.3 billion in inflows (323,000 BTC, or 1.54% of total supply). U.S. states create 10% Bitcoin reserves, contributing $6.5 billion. Wealth management platforms allocate 0.1% of their assets ($60 billion), while public companies add another $58.9 billion. Cumulatively, these moves would drive over $150 billion into Bitcoin.
Base Case: A moderate 5% allocation of gold reserves by nation-states would lead to $161.7 billion in inflows (1,617,000 BTC, or 7.7% of supply). U.S. states raise their adoption rate to 30% ($19.6 billion), while wealth platforms allocate 0.5% ($300 billion). Public companies double their Bitcoin holdings to $117.8 billion. This scenario matches Bitwise’s overall forecast of $420 billion in inflows by 2026, capturing roughly 20.32% of total Bitcoin supply.
Bull Case: A more aggressive 10% allocation of gold reserves to Bitcoin could drive $323.4 billion in inflows (3,234,000 BTC, or 15.38% of supply). U.S. state adoption reaches 70% ($45.8 billion), wealth platforms allocate 1% of assets ($600 billion), and public companies quadruple their holdings to $235.6 billion. In this case, total inflows could exceed $426.9 billion, absorbing approximately 4,269,000 BTC.
Long-Term Implications for Bitcoin
The accelerating interest from institutional investors and sovereign entities signals a growing recognition of Bitcoin as a viable long-term asset. With approximately 94.6% of its total supply already mined—19,868,987 BTC as of May 2025—Bitcoin is increasingly seen as a hedge against inflation, fiat currency debasement, and systemic financial risks.
As traditional and sovereign investors deepen their exposure to Bitcoin, the next few years could mark a significant shift in global asset allocation. The implications extend beyond price appreciation, potentially positioning Bitcoin as a foundational component of modern diversified portfolios.
