Capitalize on Bitcoin’s evolving macro hedge properties through institutional custody providers and ETF infrastructure. Targets 25-40% IRR via strategic exposure to enterprise-grade storage solutions and regulatory-compliant financial rails.
As Bitcoin’s 90-day correlation with S&P 500 declines to 0.32 (vs 0.41 YTD), institutional adoption creates asymmetric opportunities in custody infrastructure. This strategy targets companies enabling secure storage and ETF productization, projected to capture $15B+ incremental demand through 2025.
Context
Bitcoin’s macro narrative strengthened post-2023 banking crisis, with custody solutions seeing 42% YoY revenue growth. SEC’s potential ETF approvals mirror 2017 gold trust expansion patterns, while CME open interest hits $4B amid institutional participation.
Strategy Explanation
Focus on enterprises monetizing Bitcoin’s institutionalization:
- 40% allocation to custody leaders (Coinbase/Fidelity)
- 35% to ETF service platforms (BlackRock/BitGo)
- Rebalance quarterly based on custody fee compression below 15bps
Token Targets
Concentrate on infrastructure proxies:
- Publicly traded custody providers (COIN, FIS)
- ETF-adjacent tech (BLOB for registry services)
- 15% allocation to on-chain analytics firms
Expected Returns & Risks
25-40% IRR projected if ETF AUM reaches $75B by 2025. Key risks include SEC delays (30% probability per Bloomberg) and custody concentration (>70% assets held by 3 providers). Hedge via CME futures covering 20% exposure.
Exit Signals
Trigger profit-taking at:
- $1.5T BTC market cap (current $950B)
- ETF net inflows sustaining $500M/month
- Custody provider dominance below 55% market share
