Sovereign entities choose indirect Bitcoin exposure through strategies to navigate restrictions – StanChart

Sovereign wealth funds and state entities are increasingly choosing to gain exposure to Bitcoin (BTC) through Strategy (MSTR) rather than through direct spot Bitcoin exchange-traded funds (ETFs), according to Geoffrey Kendrick, Standard Chartered’s head of digital assets research.

In a report released on May 20, Kendrick indicated that recent regulatory filings reveal that sovereign investment in Bitcoin has primarily been driven by increased MSTR holdings over the past quarter, despite a lack of significant activity in direct ETF investments.

These filings support the notion that sovereign interest in Bitcoin is on the rise, with various nations looking to establish their presence in the cryptocurrency market.

### Rising Indirect Exposure

Kendrick pointed out that while news has focused on Wisconsin’s divestment from a 3,400 BTC-equivalent ETF, the notable growth stemmed from government and public institutions purchasing equity in Strategy, which currently holds a substantial 576,230 BTC.

Regulatory disclosures indicate that Norway, Switzerland, and South Korea were particularly active in acquiring MSTR shares in the first quarter, collectively amassing more than 1,600 BTC in MSTR exposure.

In the United States, state pension funds in California, New York, and North Carolina also contributed an additional 1,000 BTC equivalent through MSTR, contrasting with the actions of Wisconsin, which withdrew from ETF investments.

At the same time, Abu Dhabi expanded its direct ETF holdings by 300 BTC, increasing its total to 5,000 BTC, while Saudi Arabia’s central bank made its debut with a small allocation.

Kendrick noted that the 13F filings highlight the increasing trend of institutional investors utilizing MSTR as a pathway into Bitcoin markets.

He emphasized that the appeal of Strategy lies in its unique role as a leveraged alternative to Bitcoin, particularly for allocators facing operational or regulatory hurdles to direct digital asset ownership.

### Wider Implications

Although overall sovereign ETF positions have not fluctuated significantly, influenced by Wisconsin’s exit, Standard Chartered interprets the net growth in MSTR exposure as a positive indicator.

These actions align with the bank’s long-held perspective that Bitcoin could potentially reach $150,000 with the broader integration of institutional players by the end of this year, and soar to $500,000 by the conclusion of President Trump’s current term in 2028.

In its analysis, Standard Chartered stated that recent 13F data supports the belief that Bitcoin (BTC) may hit the $500,000 milestone before Trump’s term ends as it attracts a wider array of institutional participants.

The report highlighted that combined ETF and MSTR holdings have surpassed 100,000 BTC in quarterly investments, underlining Bitcoin’s rising significance within conventional investment portfolios.

As geopolitical tensions and inflation persist, sovereign entities seem to be cautiously exploring Bitcoin as a potential store of value, often through indirect means.

Kendrick wrapped up his insights by indicating that the specificity and variety of Bitcoin-related 13F filings are “continuing to evolve,” suggesting a deeper market engagement and more granular data in forthcoming disclosures.