Bitcoin is no longer just a financial asset – it’s a political one

For years, bitcoin was dismissed as a niche asset – too volatile for institutions, too unregulated for policymakers. However, this perception has shifted. Bitcoin is no longer just a financial asset; it has become a political and strategic tool, shaping policy decisions, institutional investment, and even national economic strategies.

Donald Trump’s return to the White House has brought this transformation into sharp focus. His administration’s executive order on digital assets signals a policy shift: rather than suppressing Bitcoin, the US is increasingly viewing it as a strategic financial instrument – and as a result, investment in bitcoin has soared.

In the past month alone, from 14 January until 14 February 2025, Bitcoin ETFs in the US have seen over $US4 billion in net inflows, while both Australian Bitcoin and Ethereum ETFs picked up $US22 million, despite Bitcoin pulling back 10 per cent from its recent peak.

Bitcoin ETFs now hold nearly 6 per cent of the worldwide bitcoin supply, potentially influencing underlying demand, surpassing the 2 per cent of global gold supply held by gold ETFs. US and Australian spot bitcoin ETFs have experienced remarkable growth, attracting tens of billions of dollars within the last 12 months.

This influx of capital highlights how institutional adoption remains strong, even during periods of market volatility, with signs of less regulation also supporting the digital currency.

While details remain vague, discussions about a US Bitcoin reserve and a more relaxed regulatory environment are gaining traction. These moves mark a break from the past, reinforcing Bitcoin’s legitimacy at the highest levels of government.

Bitcoin is not just a trade, but it is becoming a core asset class, integrated into the financial system.

But the story isn’t just about political posturing. Beneath the headlines, Bitcoin’s infrastructure is evolving at an extraordinary pace. The approval of spot Bitcoin ETFs has transformed how capital flows into digital assets, unlocking institutional demand that was previously constrained by regulatory uncertainty.

This is set to trigger more retail money into cryptocurrency ETFs. Potential regulatory changes and the ease of investing in Bitcoin will likely add to its demand. Spot Bitcoin ETFs are making it much easier for anyone to invest with just a few hundred dollars.