Now is a special moment in the history of Bitcoin (BTC 0.75%), and it probably won't ever happen at this scale ever again. Funds, banks, and even governments are accumulating the coin with gusto, and they're even competing with each other to secure a position, sending prices higher and higher.
Put differently, there is only one first wave of large-scale, regulated allocation. Buying this asset during this wave is more likely to pay off than waiting until it's over in the hopes of getting a lower price on your purchases.
Let's explore this concept a bit further and appreciate why now is the time to buy Bitcoin.
Image source: Getty Images.
The great allocation is underway
Financial institutions and institutional investors are now building up the Bitcoin positions that they will, in all likelihood, be holding for years to come. The clearest signal that the wall of institutional capital has arrived is the rise of U.S. spot Bitcoin exchange-traded funds (ETFs), which hold actual coins in custody.
Together, these ETFs have amassed more than $144 billion of assets; on Aug. 14 alone there were net inflows of about $370 million. It doesn't take long for buying power of that magnitude to translate into higher prices.
That demand is colliding with a tightening supply, which will never get any better than it is today, per the coin's protocol. After Bitcoin's fourth halving in April 2024, new issuance fell to roughly 450 bitcoins per day. In early 2024, ETF net inflows were already far outpacing new supply even before the halving took effect. When an asset persistently experiences more demand and slowing supply growth, it typically means higher prices; during the past three years alone, Bitcoin has gained about 430%, so its increasing scarcity is definitely working in favor of holders.
Meanwhile, the largest asset managers now publish dedicated Bitcoin fund pages, a sign of mainstreaming and distribution reach rather than niche speculation. In other words, the first wave of regulated buyers is actively soaking up supply. They aren't about to do an about-face, barring some major unforeseen circumstances likely having to do with government regulations.
Again, this wave will only happen once.
New structural holders are soaking up supply too
There is a second institutional buyer cohort that also does not behave like fast money, specifically the sovereigns.
Governments collectively held more than 480,000 bitcoins, worth nearly $54 billion in total, which works out to be about 2.3% of the asset's maximum supply.
Within that, the U.S. government controls one of the largest holdings via asset seizures from criminal cases. The U.S. held at least 198,000 bitcoins near the end of 2024, and seizures executed since then have likely increased that total.
Crucially, the policy framework for that trove is changing right as it's growing. In March, the White House mandated the creation of a Strategic Bitcoin Reserve (SBR) to manage government-owned coins, with forfeited Bitcoin slated to capitalize the reserve. Therefore, there has been a structural shift in expected sell-pressure; before this, the federal government auctioned off its coins.
ETF sponsors and sovereigns typically buy to hold, and they rebalance deliberately rather than impulsively. They do not react to day-to-day headlines. If ETFs, banks, companies, and governments together keep accumulating, the floating supply of the asset shrinks. Price discovery then happens higher because buyers must bid for a scarcer float.
For investors with multiyear horizons, there's an obvious move to make here: Accumulate Bitcoin on a schedule you can stick with through volatility. Let the one-time bolus of institutional and sovereign buying do the heavy lifting, and sit tight.
If this investment thesis holds, and I'm heavily betting with my capital that it will, your future self will thank you for buying when the biggest buyers were building their positions.
