Bitcoin’s Baffling Downward Swings

The Sino-American trade war may be worsening, but the lights remain green for bitcoin.

The banking sector endorses bitcoin!

Last week, the largest European bank published a report predicting bitcoin ‘s entry into central bank reserves before 2030. This week, it was the turn of the third largest American investment bank to take the plunge.

Morgan Stanley has just authorized its financial advisors to offer bitcoin , up to 4% of their portfolio. More if the client requests it.

Morgan Stanley already offered Bitcoin ETFs (BlackRock’s IBIT and Fidelity’s FBTC) since August 2024, but only to those holding at least 1.5 million dollars in assets…

Now, all types of accounts, including retirement savings accounts, can invest in bitcoin. We are talking about 16 million clients worth 8 trillion dollars.

Things are also clearing up in Russia. According to the TASS news agency, Deputy Finance Minister Ivan Chebeskov acknowledged that around 20 million Russians use cryptocurrencies and that the government should not oppose this reality.

TASS also informs us that cryptocurrency platforms held the equivalent of 10 billion dollars at the end of the first quarter of 2025, a 27% increase year on year. Mostly in bitcoins (62%) and USDT and USDC stablecoins (16%).

Meanwhile, the first deputy governor of the Russian central bank, Vladimir Chistyukhin , announced that banks can now touch bitcoin. “We have reached the point where we must legalize cryptocurrency investments”, he said.

One wonders why Russia was so sluggish, knowing that Russian banks are disconnected from the SWIFT network and that about half of Russia’s foreign exchange reserves are frozen (~300 billion euros). But everything comes to those who wait. Hodl!

Bitcoin, an investment but also a currency

We are still waiting for other countries to follow in El Salvador’s footsteps by removing capital gains tax on bitcoin payments.

But maybe not for long. The Brazilian Chamber of Deputies rejected on October 10 the proposal for such a tax (18%). The Brazilian Parliament wants to preserve the tax exemption for capital gains up to 6,500 dollars per month.

That said, the Brazilian Central Bank still prohibits the use of cryptocurrencies as a means of payment. But just like in Russia, 20 million citizens demand it. In other words, the pressure is rising.

Not a month goes by without a multinational announcing acceptance of bitcoin. We learned this week that Carrefour is testing the Lightning Network and that UBER was planning to implement it in the near future.

According to Jack Dorsey, founder of Twitter and CEO of Block, “we need a tax exemption for daily bitcoin transactions”. American senator Cynthia Lummis agrees:

The American bill proposal does not go far enough, however. The tax exemption is limited to payments under 300 dollars, up to 5,000 dollars per year. Could be better.

On another note, Cynthia Lummis also spoke recently about the “Bitcoin Act” :

Legislating is a long-term job and we continue to work for the adoption of this law, but thanks to President Trump, the acquisition of funds for the strategic bitcoin reserve can begin anytime.

Cynthia Lummis, American Senator.

Moreover, it is rumored that the Treasury Secretary declared at a private dinner that his government indeed intends to accumulate more bitcoins…

The institutional rush is just beginning

The giant fund State Street (4.1 trillion $) expects most institutional investors to double their bitcoin holdings by 2028. This forecast is based on a survey conducted among international financial institutions.

For 27% of them, bitcoin currently generates the highest returns in their digital asset portfolio. Nearly a quarter expect this to continue for the next three years.

“Our analysis suggests that by 2028, the average institutional allocation to cryptocurrencies [bitcoin] could double from 3% to 6%, driven by tokenization and regulatory clarity”, said Donna Milrod, director at State Street.

Legendary investor Ric Edelman said: “A bitcoin at 500,000 dollars isn’t bold. It represents 1% of global portfolios”.

In this regard, the Luxembourg sovereign fund has just allocated 1% of its intergenerational fund (FSIL) to bitcoin. Finance Minister Gilles Roth announced it during the budget presentation to the Chamber of Deputies.

The institutional rush, driven by giants like BlackRock, Strategy, Tesla, Fidelity, Morgan Stanley and even sovereign funds like Luxembourg’s, is real. It maps out a future where bitcoin could represent much more than a simple 1% of global portfolios.

At a time when geopolitical tensions shake traditional markets, bitcoin remains a safe haven. A reserve currency in power aspiring to become the cornerstone of Bretton Woods 2.0.

Whether through central banks, institutional investors or individuals, the wind is turning for digital gold. Don’t miss our article: Bitcoin: A Historic Year-End?