Bitcoin has flirted with the $100,000 mark, but sustaining this milestone remains a challenge. Advocates often cite institutional adoption and spot exchange-traded funds (ETFs) as driving forces behind Bitcoin’s potential long-term success. However, true stability above $100K depends on deeper, structural changes in regulation, retirement investment policies, and Bitcoin’s acceptance as a strategic reserve asset akin to gold.
Key Challenges Limiting Institutional Adoption
Despite growing interest from banks, pension funds, and wealth managers, strict regulatory and accounting barriers prevent institutions from diving into Bitcoin. For instance:
- Regulations and Policies: Many institutional investors, such as pension funds, cannot hold Bitcoin directly or through spot ETFs due to administrative rules or internal mandates requiring modifications to investment structures.
- Lack of Corporate Adoption: Companies like Microsoft illustrate the hesitation among corporations. A recent proposal to add Bitcoin to Microsoft’s balance sheet was overwhelmingly rejected during a shareholder meeting.
Broader macroeconomic conditions also play a role. With the Federal Reserve maintaining interest rates between 4.25% and 4.50%, the high cost of capital limits speculative investments, including Bitcoin. In early 2025, fears of a potential recession prompted investors to favor safer assets like cash, government bonds, and the U.S. dollar, creating a “flight to quality” movement.
Regulatory Reforms Could Be a Game-Changer
Regulatory changes have the potential to unlock broader institutional adoption and drive Bitcoin’s price above $100,000 sustainably. Three key areas to watch include:
- SAB 121 Repeal: The repeal of SAB 121 guidance would allow banks to classify custodial crypto holdings as off-balance-sheet items, reducing their financial risk and enhancing profitability. This could influence European regulators to relax MiCA rules, paving the way for Bitcoin to be used as collateral in loans or financial instruments.
- Retirement Investment Flexibility: Easing Employee Retirement Income Security Act (ERISA) rules could permit fiduciaries to allocate retirement account assets to Bitcoin. Such changes would unlock massive capital inflows and further integrate Bitcoin into traditional financial systems.
- Bitcoin as a Strategic Reserve Asset: Bitcoin’s recognition as a strategic reserve asset could solidify its status as “digital gold.” While direct government purchases are uncertain, policies restricting the sale of Bitcoin holdings could reduce market volatility and strengthen its legitimacy in global financial markets.
Macroeconomic Shifts and Bitcoin’s Potential
Macroeconomic trends also support Bitcoin’s long-term growth. In 2025, fears of a global recession prompted a surge in demand for the U.S. dollar and short-term government bonds, with the six-month Treasury yield dropping to 4.30%. If this trend reverses, as investors move away from safer assets, Bitcoin could emerge as a preferred hedge against inflation and economic uncertainty.
As institutional barriers are removed and confidence in Bitcoin’s role as a reserve asset grows, the foundation for a stable price above $100,000 could finally take hold.
