Bitcoin in 2025: the institutional cycle?

A Promising Institutional Turning Point

Donald Trump, a Catalyst

The launch of Bitcoin spot ETFs in the United States in January 2024 was a strong first signal of a change in mindset about Bitcoin (BTC). Long considered a useless creation, without fundamentals, reserved for criminals, energy-intensive, or even dangerous, Bitcoin is now seen as an essential asset in an investment portfolio.

However, uncertainty still weighed on the cryptocurrency sector: the political leaning of the future U.S. president. Donald Trump's re-election in November 2024 - who decided to make cryptocurrencies a key battleground - marked a decisive turning point for the industry's future. The announcement of his victory immediately triggered a Bitcoin bull rally, propelling it up by more than 40% to reach nearly $99,000 today.

During his election campaign, Donald Trump had declared that his administration would prioritize building a robust digital economy, where Bitcoin would play a central role. The most anticipated commitment remains the easing of regulation and the rejection of strict policies implemented between 2021 and 2023, symbolized by his intention to replace Gary Gensler as head of the SEC.

The Bitcoin Act Project

Just weeks after the election, the Trump administration is already moving forward with concrete commitments. The flagship proposal is the Bitcoin Act, supported by Senator Cynthia Lummis. This ambitious law aims to establish a national strategic reserve in Bitcoin, comparable to gold reserves, with the goal of accumulating one million BTC.

To achieve this goal, the project plans for annual purchases of up to 200,000 BTC, representing a potential injection of $18.2 billion per year at the current price. Furthermore, it proposes to retain assets confiscated by U.S. authorities, currently approximately 69,370 BTC.

According to Cynthia Lummis, this reserve would strengthen the United States' position as a leader in the global digital economy. More importantly, such a project could encourage other governments to reassess their own reserves and integrate Bitcoin.

Other Recent Political Changes

At the local level, the State of Pennsylvania has proposed allowing its treasury to hold Bitcoin. This project could pave the way for other states to follow suit in diversifying their reserves and adopting Bitcoin as a strategic asset.

Meanwhile, Donald Trump's appointment of Howard Lutnick as Secretary of Commerce sends a strong signal. A fervent Bitcoin supporter and CEO of Cantor Fitzgerald, Lutnick advocates for an increased role of cryptocurrencies in the U.S. economic infrastructure.

Finally, discussions between Trump and Brian Armstrong, Coinbase CEO, demonstrate a willingness to revise certain restrictive rules, such as Staff Accounting Bulletin 121. This reform could facilitate the integration of Bitcoin into institutional balance sheets by removing accounting obstacles that have previously hindered large companies.

The American Crypto Lobby Appeals to Donald Trump

This Friday, November 22, 2024, the Blockchain Association, which is the main lobbying organization for digital assets in the United States, addressed an open letter to the president and Congress. In this letter, the association expressed its optimism about a potentially more favorable regulatory environment and detailed five key recommendations for Donald Trump's new administration.

1. Establish an adapted regulatory framework: The association calls for bipartisan legislation to structure markets, particularly stablecoins, encouraging innovation while protecting consumers.
2. End banking exclusion for crypto companies: Companies operating in the cryptocurrency sector are often denied access to traditional banking services. This practice, according to the association, hinders innovation and must stop.
3. Appoint a new SEC chair and repeal accounting rule SAB 121: Regulation by enforcement, adopted under the previous administration, is deemed "hostile". A change in leadership is requested to ensure a more equitable environment.
4. Review tax rules through new Treasury and IRS leadership: Initiatives like the "Broker Rule" risk pushing innovative projects overseas. Clear and favorable tax treatment is crucial for retaining talent on American soil.
5. Create a crypto advisory council: A public-private collaboration is essential to establish intelligent rules that promote the industry while protecting consumers.

Note that some of these recommendations are already being followed by the Trump administration. For example, the recent meeting between the future U.S. president and Brian Armstrong, CEO of Coinbase, shows a willingness to consult industry players to better help them develop.

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Corporate Adoption: A Domino Effect

Corporate adoption of Bitcoin is experiencing unprecedented acceleration. While giants like MicroStrategy and Marathon Digital led the way, many companies, both large and small, operating in various sectors, are joining this movement. This trend demonstrates Bitcoin's rising power as a strategic tool for corporate treasury management.

MicroStrategy and Marathon Digital, Pioneers

Among companies holding the most Bitcoin, MicroStrategy remains undeniably the leader. With more than 331,200 BTC, representing 1.7% of the total circulating supply, Michael Saylor's strategy is simple: buy regularly, regardless of price, to accumulate maximum bitcoins.

In November 2024, while Bitcoin's price was trading above $85,000, MicroStrategy acquired 51,780 BTC for $4.6 billion, the largest purchase in the company's history.

Marathon Digital, meanwhile, combines intensive mining with strategic purchases. After raising $980 million through convertible bonds, Marathon plans to further increase its reserves, already at 27,562 BTC, thus consolidating its position among the largest institutional Bitcoin holders.

A Strategy That's Becoming Mainstream

Bitcoin adoption is no longer limited to technology or financial companies. Now, companies from various and diverse sectors see Bitcoin as a means to diversify their treasury. Is this "FOMO" following the price increase or simply a general awareness of Bitcoin's utility?

In any case, according to a recent Cointelegraph study, thousands of private companies have taken the leap and are adopting Bitcoin. Let's look at a non-exhaustive list of the most important companies that have recently announced adding Bitcoin to their treasuries:

• Metaplanet, a publicly traded Japanese company, has accumulated 1,018 BTC for a total value of $91 million, aiming to protect its treasury from yen volatility.
• Genius Group, specializing in artificial intelligence, has adopted a "Bitcoin First" strategy, committing 90% of its current and future reserves to Bitcoin. The company currently holds 153 BTC, with a goal of reaching $120 million in BTC.
• Acurx Pharmaceuticals, a medical sector company, recently allocated $1 million to Bitcoin, despite mixed investor reaction (-26% in stock price).
• Semler Scientific, specializing in medical equipment, now holds 1,273 BTC, valued at $114 million. Its CEO emphasized Bitcoin's importance as protection against inflation in a context of increased economic pressure.
• SAIHEAT Limited, an energy provider for data centers, the company currently holds 102 BTC and regularly purchases bitcoins on the market.
• Solidion Technology, a player in battery construction materials, allocates 60% of its excess treasury to Bitcoin. The company cites progress in Bitcoin ETFs and likely regulatory evolution as decisive factors.
• Anixa Biosciences, a Nasdaq-listed medical sector company, recently approved Bitcoin purchases in the company treasury through its management committee.

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Conclusion

The 2020-2021 cycle is considered the cycle of retail investor adoption, with a significant increase in cryptocurrency holders worldwide. For a long time, it was predicted that the next cycle would be that of institutions and governments.

Recent events depicted in the few lines of this analysis suggest that 2025 could indeed be the year of Bitcoin's institutionalization. The approval of Bitcoin spot ETFs, Donald Trump's election, Bitcoin's price rise, and even Michael Saylor's bold strategy, these elements could likely push companies (and why not, governments) to "FOMO," just as retail investors did in 2021.

For now, this institutionalization is almost exclusively limited to Bitcoin. Even though Ethereum has its own spot ETF in the United States, we are forced to note that inflows do not show massive interest.

While 2025 is shaping up to be a pivotal year, it also raises questions about Bitcoin's future: will it remain faithful to its principles of decentralization or become a pillar of the institutions it initially sought to bypass? One thing is certain: Bitcoin's potential as a strategic asset is clearer today than ever before, and 2025 could well be the ultimate demonstration.