A confluence of factors is driving a new wave of liquidity into Bitcoin, with oil-rich investors from the Middle East increasingly playing a pivotal role. These investors, seeking diversification and hedging opportunities, are drawn to Bitcoin's potential as a store of value and a strategic asset in a changing global financial landscape.
Several sovereign wealth funds in the Middle East have already made significant investments in Bitcoin ETFs. For instance, the UAE sovereign wealth funds Mubadala and Abu Dhabi Investment Council (ADIC) acquired over 16 million shares in Bitcoin ETFs. Mubadala also disclosed a $408.5 million stake in the iShares Bitcoin Trust (IBIT). ADIC holds nearly 8 million shares, while Mubadala has approximately 8.7 million shares. This activity underscores a growing trend of institutional capital flowing into the digital asset sector, particularly in the Middle East, where governments are increasingly integrating blockchain technology and cryptocurrencies into their financial ecosystems.
This interest stems from several factors, including the UAE's established position as a key player in the global digital asset landscape. The country boasts a crypto ownership rate exceeding 30% of its population and saw inflows of USD 34 billion between July 2023 and June 2024. Further boosting its attractiveness is the nation's zero-tax policy on personal crypto gains and clear regulatory frameworks. The central bank's planned launch of a national digital dirham is expected to solidify the UAE's position as a hub for digital asset innovation.
Michael Saylor, a prominent Bitcoin advocate, has been actively pitching Bitcoin to Middle Eastern sovereign wealth funds, framing it as "digital capital" and outlining its potential to attract trillions of dollars. He suggests that by offering Bitcoin-backed credit and custody services, these nations could become the "Switzerland" of digital capital, drawing in significant international investment.
Beyond sovereign wealth funds, institutional investors, in general, have embraced Bitcoin on an unprecedented scale. By early 2025, a majority of institutional portfolios included digital assets, with Bitcoin leading the way. Approximately 59% of institutional investors now allocate at least 10% of their portfolios to Bitcoin and other digital assets. This influx of institutional capital has fundamentally altered Bitcoin's trajectory, signaling a new phase of market maturity.
The increased institutional interest is also reflected in the growth of Bitcoin ETFs. US-listed Bitcoin ETFs have consistently grown, as have the number of institutions reporting exposure to them. In Q3 2025, Bitcoin's price rose 6.4%, while US Bitcoin ETF AUM rose 13%.
This liquidity wave comes at a time when the Federal Reserve's monetary policy is also playing a crucial role. The Fed's recent $13.5 billion repo injection and expectations for a rate cut have improved liquidity conditions, further supporting Bitcoin's price. A potential expansion of the Fed's balance sheet could drive Bitcoin into a renewed bull phase in 2026.
While some analysts have revised their short-term Bitcoin price targets downwards, long-term forecasts remain optimistic. Factors such as increasing scarcity due to halving cycles and growing global adoption support projections of Bitcoin reaching between $250,000 and $1 million by 2030. However, some analysts predict a price between $90,109 and $91,038 by the end of 2025.
In conclusion, the influx of liquidity from oil-rich investors, combined with growing institutional adoption and supportive macroeconomic policies, is creating a strong foundation for Bitcoin's next growth phase. While short-term volatility is to be expected, the long-term outlook for Bitcoin remains positive, with the potential for significant price appreciation in the years to come.
