Sovereign wealth funds and state institutions are increasingly opting to gain Bitcoin (BTC) exposure through Strategy (MSTR) rather than spot BTC exchange-traded funds (ETFs), according to Standard Chartered’s head of digital assets research, Geoffrey Kendrick.

In an investor report published May 20, Kendrick said that regulatory filings show that increased MSTR holdings drove the bulk of sovereign Bitcoin accumulation over the past quarter, even as direct ETF activity remained flat overall.

The filings confirm speculation that sovereign interest in Bitcoin is growing every quarter, with nations starting to build exposure in various ways.

Indirect exposure on the rise

Kendrick noted that while headlines focused on Wisconsin’s 3,400 BTC-equivalent ETF exit, the real momentum came from governments and public institutions buying equity in Strategy, which now holds 576,230 BTC.

Regulatory filings reveal that Norway, Switzerland, and South Korea were among the most active buyers of MSTR during the first quarter, collectively adding over 1,600 BTC equivalent of exposure via MSTR shares.

In the US, state pension funds in California, New York, and North Carolina also added another 1,000 BTC equivalent via MSTR. This contrasts with Wisconsin, which divested its ETF exposure.

Meanwhile, Abu Dhabi increased its direct ETF exposure by 300 BTC equivalent, bringing its total to 5,000 BTC, and Saudi Arabia’s central bank made its first-ever appearance with a small allocation.

Kendrick said that the 13F filings show that institutional investors are increasingly using MSTR as a structural bridge into Bitcoin markets.

He added that Strategy’s appeal lies in its unique positioning as a leveraged proxy to Bitcoin, especially for allocators constrained by operational or regulatory barriers to holding digital assets directly.

Broader implications

Despite overall sovereign ETF positions remaining unchanged, offset by Wisconsin’s exit, Standard Chartered views the net increase in MSTR exposure as a bullish signal.

The moves align with the bank’s long-standing view that Bitcoin could reach $150,000 under broader institutional integration by the end of this year and $500,000 by the end of President Donald Trump’s current term in 2028.

Standard Chartered said in its report:

“The latest 13F data… supports our core thesis that Bitcoin (BTC) will reach the $500,000 level before Trump leaves office as it attracts a wider range of institutional buyers.”

The report also noted that ETF and MSTR positions have now surpassed 100,000 BTC in combined quarterly holdings, reinforcing Bitcoin’s growing presence in traditional portfolios.

As geopolitical uncertainty and inflation persist, sovereign entities appear to be experimenting with Bitcoin as a store of value, albeit cautiously and often indirectly.

Kendrick concluded the note by suggesting that the detail and diversity of 13F Bitcoin-related filings are “continuing to improve,” indicating deeper market penetration and data granularity in future disclosures.

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Standard Chartered’s global head of crypto research, Geoffrey Kendrick, believes Bitcoin (BTC) has yet to price in growing signs of systemic risk despite strengthening its case as a hedge in recent weeks.

In an April 22 client note, Kendrick warned that political pressure on the US Federal Reserve is driving bond market stress that could soon spill into crypto markets.

He pointed to the US 10-year term premium hitting its highest level in 12 years, a move he said reflects mounting concerns about inflation, debt issuance, and most notably, the potential replacement of Federal Reserve Chair Jerome Powell.

According to Kendrick:

“The current threat to the Fed’s independence via Powell’s potential replacement falls squarely into the category of government-related risks. Bitcoin should begin to reflect this shift soon.”

Bitcoin’s role as a crisis hedge remains intact

Kendrick categorized Bitcoin as a hedge against two distinct types of systemic threats: private-sector collapses such as the 2023 Silicon Valley Bank failure, and public-sector credibility shocks like central bank interference or sovereign debt doubts.

While Bitcoin often trades like a risk asset in normal conditions, Kendrick emphasized that its true function emerges during macro stress events. He added that the latest term premium spike, an indicator of long-term inflation and rate risk, represents the kind of environment where Bitcoin historically reasserts its hedge narrative.

Kendrick also drew attention to a recent divergence: while the term premium has surged in recent weeks, Bitcoin’s price has stalled below the $100,000 mark. He attributed the lag to a temporary investor focus on trade-related fears, including tech-sector tariffs, which have muted Bitcoin’s reaction.

He wrote:

“BTC is lagging the term premium as the focus temporarily rests on tech underperformance. But when the narrative rotates back to central bank credibility, Bitcoin will revert to its hedge function.”

Bitcoin’s $200k forecast unchanged

Despite short-term volatility, Kendrick reaffirmed Standard Chartered’s long-term price forecast for Bitcoin: $200,000 by the end of 2025, and $500,000 by 2028.

He attributed this projected rise to macroeconomic pressure and improving structural access via spot ETFs, as well as a maturing derivatives market.

Kendrick has previously modeled Bitcoin’s growing share in optimized gold-BTC portfolios as volatility falls. He argued that this supports higher BTC prices over time, particularly if institutional access continues to expand under the current US administration.

According to Kendrick:

“This could be what’s needed for the next all-time high.”

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Standard Chartered believes stablecoin supply could swell to $2 trillion by 2028, driving $1.6 trillion in new demand for US Treasury bills if upcoming US legislation passes as expected.

The report, authored by StanChart’s head of digital assets research, Geoffrey Kendrick, anticipates that the US GENIUS Act, which would formalize the legal framework for stablecoins, will be a massive boon to stablecoins and their growth.

The bill cleared the Senate Banking Committee in March and is widely expected to be signed into law by summer.

T-Bill Powerhouses

The GENIUS Act sets out a regulatory framework that mandates fully reserved stablecoins, with a strong preference for highly liquid U.S. assets like T-bills. Standard Chartered estimates this will drive consistent and large-scale purchases of government debt as stablecoin supply expands.

According to Kendrick:

“That level of demand is enough to absorb all the fresh T-bill issuance planned during Trump’s second term.”

Unlike prior speculative growth, the bank expects stablecoin demand to be structurally tied to fiscal markets, with issuers needing to match circulating token supply with liquid reserves.

The $1.6 trillion in projected T-bill demand reflects only newly issued stablecoins under these terms, not legacy tokens or digital assets more broadly.

The report explained that shorter-term T-bills would be the optimal reserve asset to manage liquidity needs and market volatility since issuers would want to avoid a  “duration mismatch.”

Boosting Dollar hegemony

According to the report, the rise of regulated, dollar-backed stablecoins may also reinforce global demand for the US dollar, particularly in countries facing currency instability or capital restrictions.

Standard Chartered argued that the ability to access tokenized dollars through blockchain rails can deepen the dollar’s international role without relying on traditional banking infrastructure.

Kendrick added that this new form of dollar export could act as a “medium-term offset against the current threat to USD hegemony,” especially in light of rising trade barriers and monetary fragmentation.

With legislation likely to align stablecoins more closely with the U.S. financial system, their influence may grow from a crypto-native tool into a core component of global dollar liquidity and fiscal support.

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Standard Chartered has initiated coverage of XRP with a sharply bullish outlook, predicting the digital asset could climb to $12.50 before the end of President Donald Trump’s current term.

The bank said XRP’s expanding use cases, favorable legal trajectory, and resilience amid macroeconomic volatility position it as one of the few digital assets likely to outperform during the next market cycle, according to Standard Chartered head of digital assets research Geoffrey Kendrick.

Kendrick identified XRP as a top-tier investment alongside Bitcoin (BTC) and Avalanche (AVAX), citing a combination of structural tailwinds and strategic relevance in global payments.

Legal clarity and utility expansion

The bank’s outlook rests in large part on expectations that the US Securities and Exchange Commission’s lawsuit against Ripple Labs will resolve in Ripple’s favor, removing a major overhang that has long limited XRP’s institutional adoption.

The lender’s report also tied XRP’s potential upside to US political developments, projecting that a second Trump term would likely bring greater regulatory clarity and a friendlier policy environment for digital assets.

Standard Chartered emphasized that XRP’s value proposition has evolved. Originally designed as a cross-border payments token, XRP now sits at the core of a broader network, the XRP Ledger, which the bank described as a blockchain with increasing potential for tokenization and enterprise-grade use cases.

Kendrick believes that XRP’s price could “keep pace with Bitcoin in real terms” and outlined a base-case scenario in which XRP rises from its current level near $1.90 to $12.50, assuming Bitcoin reaches $500,000 over the same time frame.

The bank expects the catalyst for this growth to emerge from a combination of improved legal positioning, network upgrades, and growing transactional demand.

XRP could surpass ETH market cap

In one of its most striking forecasts, the report projected that XRP could overtake Ethereum (ETH) in market capitalization by the end of 2025.

While Ethereum is expected to reach $8,000 in that timeframe, the bank labeled it a “loser” relative to other top assets, pointing to scalability challenges and growing competition from more specialized chains.

Kendrick contrasted Ethereum’s broader challenges with what it views as XRP’s “sustainable” growth prospects. He noted that recent leadership changes within the XRP ecosystem, alongside expanding on-chain activity, reinforce confidence in XRP’s long-term positioning.

If XRP follows the trajectory outlined in the report, it will become the second-largest non-stablecoin digital asset globally, trailing only Bitcoin.

Standard Chartered maintained its existing Bitcoin forecast of $200,000 by the end of 2025 and reiterated its confidence that the next leg higher for digital assets will be fueled by “winners” that have strong use cases and regulatory visibility.

Kendrick framed current market volatility, including tariff-driven uncertainty, as a strategic opportunity for long-term allocation. With XRP now officially on the bank’s radar, the report signals a broader shift in how institutions are reassessing digital assets once seen as legally or structurally constrained.

The inclusion of XRP in Standard Chartered’s top picks reflects a growing consensus that a new phase of adoption is underway, one that may reward assets with real-world applications and legal clarity over brand recognition alone.

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Bitcoin has encountered significant volatility, with market factors and geopolitical events making it difficult to predict where its price might settle, according to Standard Chartered head of digital assets Geoffrey Kendrick

Kendrick highlighted that the recent sharp decline in Nasdaq futures and Bitcoin prices may signal a bottoming out, but geopolitical uncertainty continues to apply downside pressure in the near term.

Market Uncertainty

Kendrick pointed out that Bitcoin has experienced significant price fluctuations, exacerbated by a sharp 5% decline in Nasdaq futures and the lack of clarity around critical issues such as US tariffs, the Ukraine conflict, and potential changes to tax policy.

While these factors have contributed to market risk, Kendrick sees them as transient and suggests that Bitcoin could recover once these issues stabilize.

However, he reiterated that Bitcoin continues to face downward risk and could fall to the post-election price range of $69,000-$76,500 in the near term before finding support.

He said:

“Until we get some certainty on tariffs/Ukraine/tax cuts/Doge cuts it is difficult to call a bottom for risk.”

Kendrick also highlighted the impact of President Donald Trump’s recent announcement regarding a strategic crypto reserve that would include digital assets beyond Bitcoin. He noted that while the inclusion of non-Bitcoin coins in the crypto market has generated debate, Trump’s influence on the market has heightened volatility.

Strategy and Bitcoin

Kendrick also examined Strategy (MSTR), which recently rebranded from MicroStrategy, highlighting that the firm’s stock has already fallen to levels recorded after the November US elections. Despite this drop, Kendrick emphasized that the company’s stock performance remains intertwined with Bitcoin.

He noted firm’s stock price has been hovering around the $242.69-$261.20 per share range for several days, without closing below this level, which indicates support at this level. However, its unclear if this is the local bottom for the stock due to the global economic uncertainty and lackluster performance of the equities market.

Kendrick further noted that MicroStrategy’s average purchase price for Bitcoin is $65,000 and its stock could potentially fall further if Bitcoin fallsto new yearly lows.

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