Bitcoin‘s BTC/USD path to reaching $500,000 before President Donald Trump leaves office hinges on long-term investment from state pension funds.

That’s according to Standard Chartered‘s head of digital assets research, Geoffrey Kendrick. In a research note on Tuesday, Kendrick highlighted that state pension funds currently represent just 1% of Bitcoin ETF holdings — a number he expects to rise as institutional investment broadens.

Kendrick's report follows an analysis of fourth quarter 13F filings, which provide insight into institutional Bitcoin buying.

The data shows hedge funds remain dominant: Brevan Howard purchased the equivalent of 14,500 BTC in Q4, while banks such as Goldman Sachs GS increased holdings.

More notably, sovereign wealth funds have now entered the market, with Abu Dhabi's state fund reporting a 4,700 BTC equivalent position in BlackRock's IBIT ETF.

The expectation is that more banks will enter the market following the repeal of SAB 121, a regulatory rule that previously restricted banks from holding digital assets.

Additionally, Kendrick believes that sovereign wealth funds will expand their exposure, encouraged by the U.S. government's own growing Bitcoin reserves.

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For Bitcoin to reach $500,000, Kendrick argues that broader institutional adoption is necessary.

While hedge funds, banks, and sovereign funds have been increasing allocations, state pension funds remain largely absent, holding just a small fraction of total ETF Bitcoin exposure.

Long-term pension money is a critical component of Bitcoin's maturation, Kendrick says. It provides super long-term, long-only capital that stabilizes price movements and reduces volatility.

Bitcoin's path to mass institutional adoption depends on a shift from speculative trading to more strategic, long-term investment allocations from pension funds, endowments, and insurance firms.

What’s Next: Kendrick expects Q1 2025 to see continued Bitcoin purchases from banks and sovereign wealth funds.

The removal of regulatory barriers and increasing global adoption will likely support a broader range of buyers, providing additional support to Bitcoin's institutional narrative.

With 2024 seeing 499,000 BTC of spot ETF buying and MicroStrategy acquiring 257,000 BTC, Kendrick predicts even greater institutional accumulation in 2025.

The entrance of state pension funds into the market would represent a new phase of Bitcoin adoption, helping to shift the asset from an alternative investment to a mainstay in diversified institutional portfolios.

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• Abu Dhabi Wealth Fund Buy $437 Millions Worth Of BlackRock’s Bitcoin ETF

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