Ask the Manager: Federico Brokate on Bitcoin’s Breakout and What’s Driving It Past $100K

Federico Brokate, Head of U.S. Business at 21Shares, joins our Ask the Manager series as Bitcoin trades above $100K. He shares insights on what’s driving the rally, how institutional adoption is evolving, and why ARKB stands out in the growing Bitcoin ETF market.

Here's what he had to say:

Bitcoin has hit several all-time highs this year and is again trading above $100K. What macroeconomic factors have driven its recent performance, and how has your outlook evolved? 

Bitcoin has seen significant momentum this year, up more than 60% from last year and 15% year-to-date, consistently outpacing traditional assets like the S&P 500. Bitcoin’s price has rallied past $100K, yet we remain in the early stages of Bitcoin’s current cycle. Several factors have contributed to this resilience, including a favorable macro backdrop, strong institutional demand and increasing regulatory clarity for digital assets in the U.S. 

From a macroeconomic perspective, persistently high fiscal deficits, elevated government debt levels and expectations of looser monetary policy amid slowing growth have made alternative stores of value like Bitcoin increasingly attractive. With roughly $7.5 trillion sitting in money market funds – a record high – even modest reallocations into risk assets as rates decline could serve as a meaningful catalyst for further upside.

Meanwhile, inflationary pressures remain a persistent concern globally, reinforcing Bitcoin’s appeal as a non-sovereign, fixed-supply asset. 

Professional and long-term investor adoption also continues to accelerate changing BTC market dynamics. According to the most recent 13F filings, investment advisors and institutional investors (e.g., hedge funds) are adding Bitcoin ETPs to their portfolios at record levels, demonstrating growing conviction in Bitcoin as a long-term strategic allocation. 

This long-term buying base has helped Bitcoin demonstrate notable resilience amid recent geopolitical tensions. Long-term holder supply has reached an all-time high, with approximately 70% of Bitcoin’s circulating supply held by entities that haven’t moved their coins in six months or more.

At the same time, regulatory clarity is advancing meaningfully in the U.S. The GENIUS Act, a comprehensive crypto bill with strong bipartisan support, is progressing through Congress and aims to provide clear guidelines for stablecoins and digital asset markets.

Its passage could unlock further institutional participation, normalize blockchain-based transactions, and reinforce the investment case for Bitcoin and broader digital assets. Our outlook remains positive, and this maturing ownership base reinforces Bitcoin’s growing role as a durable store of value. 

Do you believe Bitcoin’s growth trajectory is sustainable in the current market? 

What’s particularly encouraging in this cycle is the breadth and depth of ​professional investor participation. ​I​nvestment advisors, insurance companies, university endowments, and global hedge funds are integrating Bitcoin ETPs into their portfolios at an accelerating pace. These dynamics point to a sustainable growth trajectory.

Data from the latest quarterly 13F filings shows that institutional holders of Bitcoin ETPs increased by 5% in Q1 2025, while investment advisor participation grew nearly 7% quarter-over-quarter. Notably, large institutions like Goldman Sachs and Brevan Howard have established multi-billion-dollar positions, reflecting a deepening conviction in Bitcoin as a long-term, strategic macro asset.

At the same time, sentiment indicators such as the Fear & Greed Index remain far from euphoric, with the index recently hovering near 62, suggesting we are not yet at the kind of overheated levels that typically precede major pullbacks.

Beyond traditional institutional flows, new categories of buyers are continuing to enter the market. Corporate treasuries globally are adding Bitcoin to their balance sheets as a strategic reserve asset, following the example of companies like MicroStrategy and Japan’s Metaplanet.

Additionally, state-level initiatives in places like New Hampshire and Arizona are exploring or implementing strategic Bitcoin reserve programs, while discussions of a potential U.S. Strategic Bitcoin Reserve framework are gaining traction in Washington. These developments expand the base of long-term holders and point to a durable, growing demand environment for Bitcoin. 

With Bitcoin’s price surging, have investors already missed the trade?

While Bitcoin is near its all-time highs, we believe we are still in the early stages of broader adoption, particularly for long-term investors.

Many financial advisors in the U.S. still do not have access to Bitcoin ETFs within client portfolios, and broader index and basket crypto products have yet to launch. Portfolio allocations are growing meaningfully, from what was once 1-2% in aggressive portfolios to notable voices like Ric Edelman advocating for higher allocations over time.

Meanwhile, new buyers, including corporate treasuries and state-level governments, are just beginning to enter the market. 

Regulatory clarity is also continuing to improve, strengthening crypto’s footing within the broader financial system and unlocking access for a wider range of institutional and retail investors. For those with a long-term investment horizon, there has never been a more compelling time to consider Bitcoin as a strategic allocation within a diversified portfolio. 

What sets the ARK 21Shares Bitcoin ETF (ARKB) apart from other Bitcoin ETFs?

ARKB provides investors with simple, secure access to Bitcoin’s long-term growth potential through a regulated and transparent vehicle. 

What sets ARKB apart is its multi-custody model, leveraging institutional-grade custodians such as Anchorage, BitGo, and Coinbase Custody to enhance security while providing cold storage protection against online threats. ARKB also integrates Chainlink Proof of Reserves technology, offering on-chain transparency that enables investors to verify holdings in real-time. 

Additionally, 21Shares’ dedicated focus on digital assets ensures operational expertise and efficiency, resulting in a competitive total cost of ownership for investors.

The partnership with ARK Invest further strengthens ARKB’s positioning, combining ARK’s research-driven thematic investment approach with 21Shares’ crypto-native operational leadership. Together, these differentiators ensure ARKB delivers institutional-grade exposure to Bitcoin with unmatched transparency, security, and ease of access. 

Why is the ETF structure a compelling vehicle for digital asset exposure? 

ETFs have become the preferred entry point for both retail and institutional investors seeking exposure to Bitcoin. They offer regulated access, daily liquidity, transparent pricing and robust operational safeguards – features that many investors value compared to directly managing digital wallets or engaging with unregulated platforms.  

Notably, ETFs have also accelerated crypto adoption more broadly, enabling investors to gain regulated exposure to digital assets even if their technical knowledge or operational capacity is limited. This accessibility is helping to broaden participation and normalize crypto investing across investor profiles. 

With ARKB, investors benefit from institutional-grade cold storage and offline custody solutions that protect digital assets from hacking and online threats, combined with full regulatory oversight and seamless access through traditional brokerage accounts. This reduces complexity for both new and experienced investors while ensuring assets are safeguarded under institutional-grade protocols.   

How should investors think about the role of Bitcoin ETFs in a diversified portfolio, particularly from a risk perspective? 

Bitcoin’s historically low correlation to equities, bonds, and other traditional assets makes it a potentially powerful diversification tool within a broader portfolio. Increasingly, Bitcoin is being recognized as a durable store of value, particularly in the current macro environment, alongside its diversification benefits. At the same time, investors should recognize that Bitcoin is a volatile asset class, and size their allocations accordingly within a broader, risk-managed portfolio. 

About Federico Brokate

Federico Brokate is the Head of U.S. Business at 21Sharesand previously served as BlackRock's Director of U.S. business strategy, where he was responsible for developing and implementing iShares' overall business strategy. He graduated from New York University.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.