Potential Surge in Bitcoin Investments Following New US Sovereign Wealth Fund

Bitcoin may experience significant capital investments estimated between $150 billion and $500 billion after US President Donald Trump issued an executive order to establish a new sovereign wealth fund. This fund will be managed by US Secretary of Commerce Howard Lutnick and US Secretary of the Treasury Scott Bessent, although the initial announcement did not mention Bitcoin explicitly.

The creation of this sovereign wealth fund (SWF) is expected within the upcoming year. Despite a lack of detailed information, analysts suggest that Lutnick and Bessent are both known advocates for Bitcoin, leading to speculation about the fund including digital assets.

Rationale Behind $150 Billion Bitcoin Inflows

Bitcoin supporter Florian Bruce-Boye shared an optimistic perspective on X, projecting that the new US sovereign wealth fund could evolve into the largest of its kind globally over time. He commented:

“The USA will establish a sovereign wealth fund, expected to ultimately reach $2 trillion, which parallels Bitcoin’s size. Under Lutnick and Bessent’s leadership, it’s highly conceivable that Bitcoin will feature in this fund.”

Bruce-Boye referenced Lutnick’s extensive Bitcoin investments and Bessent’s positive stance on the cryptocurrency. He noted that Lutnick reportedly holds “hundreds of millions in BTC, purchasing during dips,” while Bessent perceives Bitcoin as a liberating technology.

He also drew attention to existing sovereign wealth funds like Norway’s $1.8 trillion and Saudi Arabia’s $1 trillion, suggesting they could potentially increase their Bitcoin market cap influence substantially if they proceed similarly. He highlighted comments from BlackRock’s CEO, Larry Fink, regarding a sovereign wealth fund’s consideration of a Bitcoin allocation between “2% and 5%.”

Bruce-Boye further calculated that a mere 3% allocation from a total $4.8 trillion would lead to $150 billion in capital flow, translating to around 1.5 million BTC at current prices, urging those unacquainted with Bitcoin to explore it promptly.

Is a $500 Billion Inflow Possible?

In support of this optimistic outlook, Apollo co-founder Thomas Fahrer suggested on X that the US sovereign wealth fund may rapidly reach $5 trillion in assets under management (AUM). He stated, “Given that Norway’s fund is $2 trillion with a population of just 6 million, a 10% allocation to Bitcoin would amount to about $500 billion over the next few years. This is highly encouraging news.”

Fahrer’s forecast escalates the potential inflow further, indicating that if the US fund opts for a significant Bitcoin allocation, it could cause a prolonged institutional demand surge.

Jeff Walton, a digital capitalist and founder of True North, emphasized Howard Lutnick’s pivotal role in this context. Lutnick, who doubles as the US Secretary of Commerce and CEO of Cantor Fitzgerald, has a known personal stake in Bitcoin.

Walton noted several interesting points about Lutnick and his company Cantor Fitzgerald, including:

1. Lutnick’s Bitcoin holdings are “hundreds of millions,” and could rise to billions.

2. Cantor Fitzgerald possesses a 5% stake in Tether and oversees its treasury assets.

3. The company is initiating a $2 billion Bitcoin financing business that will use BTC as collateral for USD loans.

4. “We aim to create the premier platform for financing Bitcoin.”

5. “Cantor Fitzgerald is committed to supporting Bitcoin.”

For the time being, the global Bitcoin community watches closely, aware that even a small allocation from the impending US sovereign wealth fund could significantly alter the investment landscape and potentially introduce a new era of institutional engagement globally.

As of the latest update, Bitcoin is valued at $99,450.