Popular Bitcoin curation account @DocumentingBTC posted on X this week, “The Federal Reserve Officially Approves Kraken Financial as the First Digital Asset Bank with Direct Access to U.S. Payment Systems,” which garnered more than 3,000 likes. The post sparked a wave of commentary about what it would mean for crypto companies to gain the same kind of access to the Fed that traditional banks have had for decades.
Bitcoin is trading at nearly $70,000. Some market watchers believe the Kraken news is just the kind of institutional improvement that could push prices towards $100,000.
what happened to the kraken
On March 4, the Federal Reserve Bank of Kansas City approved a limited purpose Federal Reserve Master Account for Kraken Financial, a special purpose depository institution chartered by the State of Wyoming. The period is one year. Access is restricted. But its symbolism is hard to miss.
Kraken co-CEO Arjun Sethi told Fortune that Kraken went through Wyoming to obtain special purpose custodian approval, rather than the OCC route that other crypto companies have tried. Jonathan Jahim, Kraken’s head of policy, told Reuters the approval was “a great demonstration of regulatory rigor and cooperation”, adding that it “promotes the principles of safety, soundness and innovation”. The account will allow Kraken to hold balances with the Fed and settle payments in US dollars on Fedwire, bypassing the correspondent banks that crypto companies have long relied on.
Reactions to X were not always positive. “ICBA and 42 state bank associations opposed the Federal Reserve Bank of Kansas City’s approval of Kraken Financial’s master account,” the Independent Community Bankers of America posted on its official account. Rep. Maxine Waters, ranking Democrat on the House Financial Services Committee, asked the Kansas City Fed to explain its legal authority for the decision.
One of X’s anonymous traders caught on to the skeptics’ perspective, saying, “Kraken’s Fed approval…is assimilation, not pure adoption. Don’t confuse consolidation with decentralization.”
Why is Bitcoin price important?
The Kraken news comes at a time when money from institutional investors is already flowing back into Bitcoin. The Spot Bitcoin ETF received $789 million in inflows last week, its highest weekly total since February. BlackRock continues to lead this trend.
Charles Schwab, which serves approximately 39 million securities clients, recently released a risk sizing framework showing that an aggressive portfolio model could hold up to 8.8% of Bitcoin under certain return assumptions. Although Schwab stopped short of calling it a recommendation, the signal caught the attention of CryptoX as a whole. “The $11 trillion Schwab just told 40 million customers to add Bitcoin to their portfolios,” Bitcoin historian and former CoinDesk editor Pete Rizzo posted, and despite exaggerating what Schwab actually said, the characterization received more than 2,000 likes.
Kevin Olsen, a payments industry educator who runs the YouTube channel Payments Professor, analyzed Kraken’s approval in a video, predicting that it is “just the first of many and signals a permanent change in the way electronic banks and crypto institutions interact with sovereign financial rails.”
Bitcoin rose about 3% this week, rebounding between $70,300 and $73,200. The $75,000 level is the next test.
bull incident
Pierre Rochard, CEO of Bitcoin Bond Company and a long-time supporter of Bitcoin, said this bluntly about X: “We have never seen a four-year halving cycle with consistent bidding from institutional investors and sovereign assets like we will see in 2026.” His argument is that the old four-year boom-and-bust pattern is breaking down because educational institutions are now permanent buyers rather than tourists.
The numbers back him up. Morgan Stanley launched its own low-fee Bitcoin ETF (MSBT) on April 8th, with fees of just 0.14%. “Morgan Stanley just handed over Bitcoin to 16,000 wealth advisors who manage $6.2 trillion in client assets,” Gary Krug, Head of Bitcoin Strategy at Ifinyo, posted. “Their recommended allocation to a growth portfolio is 2% to 4%.”
Wall Street’s price targets for the end of 2026 are piling up. Standard Chartered’s Jeff Kendrick makes $100,000. TD Cowen has a $140,000 goal associated with his Bitcoin treasury company. Bernstein’s price is $150,000. Fundstrat’s Tom Lee ranged between $200,000 and $250,000. Kraken’s endorsement feeds directly into all of these papers as it removes a layer of friction between institutional investing and the crypto ecosystem.
bear incident
The one year duration of Kraken’s account says something. The Fed is treating this as a trial, not a judgment.
“TD Cowen lowers Strategy price target by 20.5% to $350, forecasting the company’s Bitcoin profits will decline from $10.17 billion in 2025 to $7.87 billion in 2026,” CoinMarketCap reported. TD Cowen, with a $140,000 Bitcoin target, has ended its bet on the largest corporate Bitcoin holder. It’s mixed signal to say the least.
Nor does everyone at X buy into the institutional narrative. “I expect it to fall below $50,000 by November 2026,” one trader posted, arguing that a short-term rally to $80,000 or $90,000 would give way to a more severe correction. Another anonymous account set a year-end goal of $52,500, citing historical pattern analysis.
Then there are political risks. Waters’ investigation could lead to legislation restricting crypto companies’ access to the Fed’s payment systems. ICBA has 42 state banking associations supporting its opponents. If Congress moved to halt the Kraken test, the bullish narrative would flip overnight.
What to watch next after Bitcoin price
The big question is whether Kraken will survive on its own or whether other companies will follow suit. Jahim said the approval shows that a regulatory path exists if well-capitalized digital asset companies are willing to go through the process.
Bitcoin is hovering at $70,000 with that $75,000 barrier overhead. A breakout of high volume combined with continued ETF inflows and the launch of brokers like Morgan Stanley’s MSBT would provide the technical support to turn Wall Street’s $100,000+ target from speculation to consensus.
