Bitcoin bears argue that the spot Bitcoin exchange-traded fund (ETF) trade is over, but analysts at Bernstein believe otherwise. Despite early allocations driven by retail investors, institutional involvement is poised to grow as ETFs gain approval at major financial institutions by Q3 or Q4 this year. The analysts see the institutional basis trade as a “trojan horse” for wider adoption, with investors now evaluating “net long” positions due to improving ETF liquidity.

Bernstein highlights that the institutional share in spot Bitcoin ETF participation is only 22%, but this is expected to rise. Financial advisors are beginning to allocate more to Bitcoin ETFs, and new FASB guidelines are facilitating corporate adoption. The increased use of Bitcoin as a treasury reserve asset is predicted to drive demand, with companies like MicroStrategy and Block leading the way.

The analysts expect Bitcoin ETF inflows to accelerate in Q3/Q4, providing new entry levels for institutional demand. They have raised their price target for Bitcoin to $200,000 by the end of 2025, with a long-term goal of $1 million by 2033, supported by unprecedented demand and strategic investments by major asset managers like Blackrock.