“The Federal Reserve officially approves Kraken Financial as the first digital asset bank with direct access to U.S. payment systems,” popular Bitcoin curation account @DocumentingBTC posted on X this week, racking up over 3,000 likes. The post sparked a flurry of comments about what it means when a crypto company gets the same kind of access to the Fed that traditional banks have kept for decades.
Bitcoin is trading near $70,000. Some market watchers believe the Kraken news is exactly the kind of institutional plumbing upgrade that could push prices toward $100,000.
What happened to Kraken
On March 4, the Kansas City Fed approved Kraken Financial, a Wyoming-licensed special purpose depository institution, for a Federal Reserve Limited Purpose Master Account. The duration is one year. Access is restricted. But the symbolism is hard to ignore.
Kraken co-CEO Arjun Sethi told Fortune that Kraken went through Wyoming to obtain a special purpose depository institution charter rather than the OCC route that other crypto companies have tried. Kraken’s chief policy officer, Jonathan Jachym, told Reuters the approval is “a great testament to regulatory rigor and cooperation,” adding that it “promotes the principles of safety, robustness and innovation.” The account allows Kraken to hold balances at the Fed and settle in US dollars on Fedwire, bypassing the correspondent banks that crypto companies have relied on for years.
Reaction to X has not been universally positive. “The ICBA and 42 state banking associations opposed the Federal Reserve Bank of Kansas City’s approval of a master account for Kraken Financial,” the Independent Community Bankers of America posted on their official account. Rep. Maxine Waters, the ranking Democrat on the House Financial Services Committee, asked the Kansas City Fed to explain its legal authority for the decision.
An anonymous trader on
Why it matters for the price of Bitcoin
The Kraken news comes at a time when institutional money is already returning to Bitcoin. Spot Bitcoin ETFs brought in $789 million last week, the highest weekly total since February. BlackRock continues to lead these flows.
Charles Schwab, which serves approximately 39 million brokerage clients, recently released a risk sizing framework showing that an aggressive portfolio model could hold up to 8.8% in bitcoin under certain return assumptions. Schwab did not call this a recommendation, but the signal brought attention to crypto.
Kevin Olsen, a payments industry educator who runs the Payments Professor YouTube channel, analyzed Kraken’s approval in a video and predicted that it was “simply the first of many approvals, signaling a permanent shift in how electronic banking and crypto institutions interact with sovereign financial rails.”
Bitcoin gained around 3% this week, bouncing between $70,300 and $73,200. The $75,000 level is the next test.
The affair of the bull
Pierre Rochard, CEO of Bitcoin Bond Company and long-time Bitcoin advocate, said it bluntly about
The figures confirm it. Morgan Stanley launched its own low-fee Bitcoin ETF (MSBT) on April 8, charging just 0.14%. “Morgan Stanley just handed over Bitcoin to 16,000 wealth advisors managing $6.2 trillion in client assets,” posted Garry Krug, head of BTC strategy at aifinyo. “Their recommended allocation for growth portfolios: 2 to 4%.”
Wall Street price targets for the end of 2026 are multiplying. Geoff Kendrick of Standard Chartered is at $100,000. TD Cowen has a $140,000 target tied to Bitcoin treasure companies. Bernstein is at $150,000. Tom Lee at Fundstrat launched between $200,000 and $250,000. Kraken’s endorsement directly fuels each of them as it removes a layer of friction between institutional dollars and the crypto ecosystem.
The bear affair
The one year duration on the Kraken account tells you something. The Fed views this as a trial, not a verdict.
“TD Cowen cut its strategic price target by 20.5% to $350, forecasting that the company’s Bitcoin earnings will fall to $7.87 billion in 2026 from $10.17 billion in 2025,” CoinMarketCap reported. This is the same TD Cowen, with a $140,000 bitcoin target, reducing its bet on the largest corporate bitcoin holder. Mixed signals to say the least.
Not everyone on X buys into the institutional narrative either. “We expect less than $50,000 by November 2026,” said one trader, arguing that short-term rises to $80,000 or $90,000 would give way to a deeper correction. Another anonymous account set its year-end target at $52,500, citing analysis of historical trends.
Then there is political risk. Waters’ investigation could lead to legislation banning crypto companies from accessing the Fed’s payment systems. ICBA has 42 state banking associations supporting its opposition. If Congress decides to end the Kraken experiment, the bullish narrative will reverse overnight.
What to Watch Next for Bitcoin Price
The big question is whether Kraken will stand alone or whether other companies will follow. Jachym said the approval shows that the regulatory path exists for any well-capitalized digital asset company willing to go through the process.
Bitcoin sits at $70,000 with that $75,000 barrier. A breakout on heavy volume, combined with continued ETF inflows and more launches from brokers like Morgan Stanley’s MSBT, would be the kind of technical confirmation that would transform Wall Street’s $100,000-plus targets from speculation to consensus.
