- Blockstream CEO Adam Back stated Bitcoin‘s third wave of adoption from pension funds and insurers is “still largely to come.”
- Back identified the first adoption wave as individual direct buying and the second as spot Bitcoin ETFs.
- Large investment banks have proposed model portfolios suggesting 2-4% allocation to Bitcoin for professional money managers.
- Bank capital rules under Basel regulations make holding Bitcoin “quite expensive” for lenders due to tier-one capital requirements.
Blockstream CEO Adam Back revealed in a Saturday interview with Bitcoin Magazine that Bitcoin’s next adoption wave from pension funds and insurers is “still largely to come,” marking a shift beyond individual buyers and spot ETFs. Back explained that the first wave consisted of individuals mining or buying Bitcoin directly, while the second arrived through spot exchange-traded funds.
However, the third wave will originate from large capital pools managed by professionals. Back noted that several large investment banks have proposed model portfolios suggesting a “2 to 4% allocation to Bitcoin.” Consequently, those allocations could flow into mutual funds for long-term savings or be used by pension funds.
Meanwhile, many people will gain Bitcoin exposure indirectly without buying it themselves. “For most people, they are not managing their own investments,” Back said, noting that money is instead handled by professional managers in pension funds, insurance companies, and life insurance policies.
Regulatory hurdles still limit how easily traditional institutions can hold Bitcoin. Back pointed out that bank capital rules make holding Bitcoin “quite expensive” for lenders, as it consumes substantial tier-one capital under global Basel banking rules. Major custodians of stocks and bonds are beginning to move into Bitcoin custody, aided by U.S. rule changes over the past year.
Bitcoin’s price was up 0.7% over 24 hours. On Stocktwits, retail sentiment around BTC moved to bearish from extremely bearish, while chatter stayed at high levels.
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