Crypto Fund Assets Poised to Surge to $650 Billion in 5 Years: Bernstein

According to a research report from broker Bernstein released on Monday, the crypto fund management sector could potentially amass assets totaling up to $650 billion within the next five years, as per CoinDesk. This optimistic projection is based on the anticipated introduction of spot-based bitcoin exchange-traded funds (ETFs) in the United States, which is expected to attract additional capital to the crypto market.

Currently, the crypto fund management industry is relatively small, often described as a "cottage industry," with approximately $50 billion in assets under management. This represents approximately 4% of the total size of the crypto market, which had a capitalization of $1.08 trillion at the time of the report.

This research comes after institutions like BlackRock submitted applications for spot-based ETFs to the U.S. Securities and Exchange Commission (SEC). The SEC recently decided to delay its decision on all spot ETF applications until October. The crypto community is hopeful that the eventual approval and launch of spot-based ETFs will open the doors to significant inflows of mainstream investments into the crypto market.

Bernstein anticipates that the demand for crypto investment products will be driven by various factors, including increased interest from investment advisors, integrated products offered by wealth and private banking services, and improved accessibility to ETFs through direct broker accounts.

As a result of these developments, Bernstein predicts that Bitcoin and Ether could collectively account for a 10% share of the ETF market capitalization, while crypto hedge funds might represent a 5-6% share. The report concludes by stating that the adoption of crypto financial products tends to follow hype cycles, and it anticipates a substantial increase in adoption, with 2024 being a pivotal year for regulatory approval of ETFs in the crypto space.

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