Crypto Asset Management Industry Could Reach $650B in Five Years, Up From $50B Today: Report
The crypto asset management industry is set to experience exponential growth in the coming years, according to analysts at Bernstein Research.
The analysts, led by Gautam Chhugani, predicted that crypto funds could reach a staggering $500 billion to $650 billion within the next five years, a significant leap from the current valuation of approximately $50 billion.
In a note published on Monday, the analysts cited several key factors driving this anticipated growth.
One crucial catalyst is the potential approval of a spot Bitcoin (BTC) exchange-traded fund (ETF).
Last month, the US Court of Appeals for the District of Columbia Circuit ruled in favor of Grayscale, ordering the SEC to set aside its earlier rejection of Grayscale’s application and reopen the review process.
The court ruled that there was no justification for the SEC to allow Bitcoin futures-based ETFs but deny spot Bitcoin ETFs.
The SEC has until mid-October to contest the ruling, coinciding with its decision on whether to approve or postpone applications from other fund companies seeking to launch their own Bitcoin products.
Should the SEC cease resistance, Bitcoin funds could enter the market as early as next year.
The Bernstein team expects ETFs to capture roughly 10% of the market capitalizations of Bitcoin and Ether, the second-largest cryptocurrency.
"Crypto financial adoption follows hype cycles, and we expect a hockey stick adoption, with 2024 as the landmark regulatory year for approval of ETFs."
In addition to Grayscale, prominent financial institutions such as BlackRock, Fidelity, WisdomTree, and Invesco have applied to launch Bitcoin ETFs.
Some fund companies are also exploring products that hold spot Ethereum (ETH) or Ethereum-linked futures.
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