In the next five years, the amount of assets under management of cryptocurrency funds may increase to $650 million as the market transitions from the “makeshift” stage to a regulated environment. This is stated in a report from the brokerage firm Bernstein, writes CoinDesk.
Currently, the volume of the direction is about $50 billion – only 4% of the capitalization of the entire digital asset industry (~$1.08 trillion at the time of writing).
The impetus for the growth of crypto funds should be the launch of spot exchange-traded funds (ETFs) based on Bitcoin, which will provide an influx of institutional investors. On July 14, the SEC accepted for consideration relevant applications from BlackRock, VanEck, Fidelity Investments, Invesco and WisdomTree. They were later joined by Franklin Templeton.
According to analysts, demand for instruments will be stimulated by “investment consultants, crypto products integrated into banking, as well as easy access to ETFs through brokers.”
According to Bernstein’s calculations, in the future, Bitcoin and Ethereum funds will account for about 10% of the crypto market capitalization, and hedge funds – 5-6%.
“Financial adoption of digital assets follows hype cycles. We expect rapid growth, with 2024 becoming a landmark regulatory year for exchange-traded fund approvals,” the experts added.
Earlier, Bloomberg analysts James Seyffarth and Eric Balchunas estimated the probability of launching a spot Bitcoin ETF by the end of 2023 at 75%. Experts have increased their chances after Grayscale’s legal victory in its case against the SEC.
Let us remind you that the department’s ex-lawyer John Reed Stark ruled out approval of a spot Bitcoin ETF. However, Bernstein described the chances of a new wave of applicants as high.
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