Bitcoin’s Institutional Era: Why Dark Stone Capital Is Accumulating the Digital Gold
Bitcoin Has Entered the Mainstream
In April 2024, the supply of newly created Bitcoin dropped significantly, decreasing the number of new Bitcoins released daily to around 450. Since then, Bitcoin’s market has evolved, becoming increasingly anchored by regulated investment funds (ETFs) in the United States. With Bitcoin prices currently around $105,000, billions of dollars flow daily into these ETFs, keeping the market liquid and stable. Additionally, recent price volatility has reached multi-year lows, making it easier and less risky for conservative investors to include Bitcoin in their portfolios.
Governments and Companies Are Buying In
While El Salvador continues making headlines by holding Bitcoin in its treasury, several other governments and state-level institutions have begun exploring similar strategies in 2025. On the corporate side, MicroStrategy remains the largest and most visible holder, but newer companies, including major technology firms are now using Bitcoin to diversify their cash holdings. Each new institutional buyer reduces the amount of Bitcoin available in the open market, helping establish it as a mainstream financial asset.
Our Investment Thesis: Bitcoin Offers Both Scarcity and Liquidity
We see Bitcoin as a valuable investment for three primary reasons. First, the daily demand for Bitcoin through regulated funds now consistently exceeds the new supply, creating upward price pressure over time. Second, Bitcoin functions effectively as a hedge against economic uncertainty, especially in an environment of rising U.S. government deficits and declining real interest rates. It shares similarities with gold but has greater potential for price appreciation. Finally, ongoing technological improvements (such as faster transaction networks and improved custodial services) make Bitcoin easier and safer for institutional investors to own.
Our Practical Strategy: Buy the Dips, Sell the Spikes
At Dark Stone Capital, we treat Bitcoin as a long-term strategic investment rather than a short-term trade. Our method is straightforward: we steadily accumulate Bitcoin in small increments (less than 2% of our portfolio) whenever the price falls below key trend lines, specifically its 200-day average (currently around $97,000). Conversely, when the price significantly spikes higher—specifically, two standard deviations above its recent 100-day average (around $118,000–120,000)—we carefully sell about 20% of our holdings. This balanced approach helps us lock in gains without fully exiting our position.
Risks to Our Strategy
While optimistic, we remain cautious about several potential risks. Regulatory shifts, especially unfavorable changes in U.S. custody or tax policies, could negatively impact Bitcoin’s value. Additionally, although unlikely, technological vulnerabilities or breakthroughs (such as quantum computing or critical software flaws) could threaten Bitcoin’s security. Lastly, sudden financial market shocks could sharply widen the price spreads on Bitcoin exchanges, impacting our ability to trade smoothly. Using regulated ETFs helps us mitigate this risk.
How We Protect Our Investment
We store our Bitcoin holdings securely in multi-signature wallets through institutional-grade custodians, conduct regular audits, and maintain comprehensive insurance coverage. We never use leverage or complex financial instruments like short options, as Bitcoin’s inherent volatility is already substantial. Instead, we rely on disciplined, periodic checks and robust security measures.
Next Steps for Our Portfolio
We plan to start by allocating roughly 3% of our multi-asset portfolios to Bitcoin, funded from existing cash or cash-equivalent reserves. Additionally, we will automate regular, small purchases whenever Bitcoin drops by at least 10% from its recent monthly highs. We’ll also formalize Bitcoin-specific guidelines in our custody policies, perform regular stress-testing at both lower and higher Bitcoin prices, and closely monitor regulatory developments from the SEC, CFTC, and IRS.
Advisor’s Note
Bitcoin’s transformation from a speculative asset to a legitimate institutional holding is undeniable. Treat Bitcoin like a volatile emerging-market currency with strong built-in scarcity: invest patiently, limit position size, and avoid frequent trading. Real wealth grows steadily; temporary price spikes and drops are simply part of the journey.
⚠️ Disclaimer
This post is for informational purposes only and should not be construed as investment advice. Always consult a qualified financial professional before making investment decisions.
