On May 8, Bitcoin (BTC) surged from a low of $93,327 the previous day to a high of $99,374, marking a significant intraday gain of over 6.4%. As the price hovers around $99,004, market participants are closely monitoring whether it will once again challenge the $100,000 threshold.
This rebound is largely fueled by an accelerating wave of institutional investment. On May 7, U.S.-listed company Thumzup announced plans to raise up to $500 million to bolster its working capital and advance its Bitcoin acquisition strategy. The same day, Japanese firm Metaplanet disclosed an additional $53.4 million purchase of 555 BTC. Beyond corporate players, New Hampshire became the first U.S. state to pass a strategic Bitcoin reserve bill, authorizing the state treasurer to hold Bitcoin within a regulated reserve framework.
“While large-scale institutional entry brings higher liquidity and reputational endorsement to the Bitcoin market, it also introduces new challenges such as increased structural complexity, heightened volatility, and greater regulatory sensitivity,” said Yu Jianing, President of Uweb and Co-Chair of the Blockchain Committee of the China Communications Industry Association. He noted that institutional buying provides substantial support for Bitcoin’s price floor and reinforces long-term holding sentiment. However, he also warned that if institutional behavior becomes highly correlated and leveraged, it could amplify systemic risks during market corrections.
Why Institutions Are Increasing Their Holdings
Although Bitcoin has gained only about 5% year-to-date—far less than gold’s impressive rally—institutions are increasingly betting on this “digital gold.”
Metaplanet, for instance, not only increased its Bitcoin holdings but also issued $25 million in ordinary bonds specifically to buy more BTC. The company now holds over 5,000 BTC, acquired at a total cost of approximately $430 million. It aims to hold 10,000 BTC by the end of 2025 and has even rebranded one of its hotels as the “Bitcoin Hotel” to attract the global crypto community. CEO Simon Gerathy describes Bitcoin as a “nuclear weapon” against yen depreciation and global economic uncertainty.
Other corporations have also been active buyers. In April alone, MicroStrategy (now known as Strategy) purchased 25,370 BTC across three transactions, spending about $2.2616 billion. By the end of the month, the company held 553,600 BTC with a total cost basis of roughly $37.9 billion.
Similarly, U.S.-listed firm Semler announced plans to issue $500 million in securities explicitly for Bitcoin purchases. Between April 25 and 29, it acquired an additional 165 BTC, bringing its total holdings to 3,467 BTC valued at around $326 million. The company’s CFO stated that Bitcoin’s decentralized nature and inflation-resistant qualities align with its long-term value philosophy.
According to Yu Jianing, companies like Strategy and Metaplanet are undergoing a financial transformation by incorporating Bitcoin into their balance sheets. While not directly involved in blockchain token issuance or Web3 protocols, these firms are positioning themselves as digital asset reserve companies, effectively becoming Web3 concept stocks in the capital markets. Their stock prices are increasingly correlated with Bitcoin’s performance, serving as valuation proxies for BTC market movements.
Beyond direct corporate holdings, Bitcoin spot ETFs are accumulating substantial BTC. Current data indicates that spot ETFs hold about 1 million BTC, nearly 5% of the total supply.
“The trend of institutions buying Bitcoin is becoming more pronounced, driven by factors beyond simple asset allocation or short-term speculation,” Yu explained. Amid valuation pressures on traditional assets, uncertain monetary policies, and frequent geopolitical disruptions, Bitcoin is increasingly viewed as an alternative reserve asset. It is gaining strategic “digital gold” status during specific macroeconomic cycles. Institutional inflows reflect not only expectations of price appreciation but also systematic strategies to hedge against inflation, fiat currency devaluation, and to diversify global portfolios.
Wang Yanbo, a digital economy scholar at the Shanghai Academy of Social Sciences, echoed this sentiment. He noted that the fundamental reason behind institutional Bitcoin accumulation is growing uncertainty around the U.S. dollar’s credibility due to political instability during the Trump administration. This has led some institutions to seek alternative safe havens, with Bitcoin emerging as a viable option to hedge against dollar depreciation and diversify portfolio risk.
Wang also highlighted that Bitcoin, like gold, is a non-yielding asset. Its value cannot be determined through discounted cash flow models and is highly dependent on market consensus. This consensus is inherently uncertain, leading to持续的剧烈价格波动 (continuous sharp price fluctuations).
U.S. States Explore Bitcoin Reserve Policies
In addition to corporate entities, some government bodies are actively considering Bitcoin strategic reserve programs.
On May 7, New Hampshire enacted the first state-level strategic BTC reserve law in the U.S., establishing a framework for allocating a portion of state funds to Bitcoin and other selected digital assets. The law is set to take effect in 60 days.
This legislation permits the state treasurer to purchase digital assets with a market capitalization exceeding $500 billion—currently, only Bitcoin meets this criterion. The holding limit is capped at 5% of the state’s reserve portfolio, and assets must be held through U.S.-regulated multi-signature mechanisms or exchange products to ensure transparency and security.
Yu Jianing views this move as a structural shift in virtual asset policy at the U.S. state level. By incorporating Bitcoin into state fiscal reserves, the law authorizes financial officials to hold BTC, potentially via exchange-traded products. This indicates that some local governments are beginning to see Bitcoin as a strategic reserve asset with long-term value, rather than merely a high-volatility speculative instrument. Such institutional experimentation reflects changing perceptions of virtual assets within public financial management systems and may pave the way for policy evolution at the state and even federal levels.
Data shows that 37 out of 50 U.S. states have proposed similar legislation, though most have not passed. On May 3, Arizona Governor Katie Hobbs vetoed a digital asset strategic reserve bill approved by the state’s House and Senate, citing cryptocurrencies as unproven investments. The same day, a related bill in Florida also failed to pass.
Other states, including Oklahoma, Pennsylvania, Montana, North Dakota, Wyoming, and South Dakota, have rejected analogous proposals due to concerns over volatility, energy consumption, and risks to taxpayer funds.
Wang Yanbo argues that despite its name, Bitcoin functions poorly as money due to its lack of a fixed anchor and extreme price volatility. If used as actual currency, it would disrupt market price signals and make transactions nearly impossible. Thus, for the foreseeable future, it remains a speculative asset. This is one reason central banks worldwide remain cautious about including Bitcoin in reserve assets.
“The concept of Bitcoin as a strategic reserve asset remains highly controversial and exploratory globally, primarily due to deep-seated conflicts involving monetary sovereignty, macroprudential regulation, and asset stability,” Yu stated. From a central bank perspective, Bitcoin does not yet meet the necessary conditions for inclusion in sovereign reserve systems. Most central banks prioritize ensuring currency stability, regulating international payments, and maintaining financial system liquidity—areas where Bitcoin still has significant shortcomings in legal status, market depth, international settlement functionality, and systemic risk resilience.
“Even if some central banks are exploring digital assets or adopting inclusive policies toward Bitcoin trading, there is insufficient consensus for its inclusion in official reserve systems, both in terms of institutional design and financial stability objectives,” Yu added.
He further analyzed that Bitcoin, as a decentralized global asset, is gradually forming a narrative as a supplementary option in the political economy of “de-dollarization.” Especially amid rising geopolitical uncertainty, returning inflation risks, and increased correlation of dollar assets, some countries or regions might consider allocating to Bitcoin for避险 (hedging) purposes and financial autonomy. However, this trend is still in its early stages globally, with immature institutionalization, scale, and cross-border coordination mechanisms. Therefore, rational evaluation of Bitcoin reserve strategies must consider the evolution speed of the global monetary system, avoiding overly politicized interpretations of short-term policy signals.
Frequently Asked Questions
Why are institutions buying Bitcoin?
Institutions are acquiring Bitcoin as a hedge against inflation, currency devaluation, and geopolitical risks. It is increasingly viewed as a digital alternative to gold, offering portfolio diversification and potential long-term value appreciation in uncertain economic climates.
What is a Bitcoin strategic reserve?
A Bitcoin strategic reserve refers to a government or institutional policy of holding Bitcoin as part of its reserve assets. This approach aims to diversify holdings beyond traditional fiat currencies and gold, though it remains experimental due to Bitcoin’s volatility and regulatory uncertainties.
How does institutional investment affect Bitcoin’s price?
Large-scale institutional buying provides significant liquidity and price support, reducing downside volatility during market dips. However, it may also increase systemic risk if many institutions employ similar leveraged strategies, potentially amplifying corrections.
Are governments likely to adopt Bitcoin reserves?
While some U.S. states are exploring legislation, most governments remain cautious. Central banks prioritize stability and sovereignty, and Bitcoin’s volatility, regulatory gaps, and technical limitations make widespread official adoption unlikely in the near term.
What are the risks of using Bitcoin as money?
Bitcoin’s high price volatility disrupts its function as a medium of exchange and unit of account. Without stable value, it is impractical for everyday transactions, and its speculative nature makes it more suitable as an asset than a currency.
How can I learn more about institutional cryptocurrency strategies?
For those interested in understanding how large organizations approach digital asset allocation, explore more strategies and analytical frameworks that break down current market trends and risk management practices.