Bitcoin ETFs will kick start a $650bn asset management empire: Bernstein

The cryptocurrency asset management sector could balloon to as much as $650 billion with spot Bitcoin exchange-traded funds leading the charge, according to research firm Bernstein.

ETFs to take up 10% of Bitcoin’s value

The current bull run will catapult spot Bitcoin ETFs’ assets under management to over $300 billion by 2025, up from about $48 billion today, Bernstein analyst Gautam Chhugani wrote in a note to investors on Monday.

Spot Bitcoin ETFs will end up making up 10% of the total value of Bitcoin, Chhugani estimated.

Since their launch on January 11, US-traded spot Bitcoin ETFs have continuously smashed records and drummed up market optimism, becoming a key driver to Bitcoin surging to a new all-time high of $69,100 on Tuesday.

The success of spot Bitcoin ETFs will pave the way for crypto asset management to become “a strategic priority for leading asset managers,” incentivising them to collaborate “with regulators to build new products,” Bernstein wrote.

“We expect more participants to turn from crypto sceptics to potential adopters, seeing the commercial opportunity,” Chhugani wrote.

The entire ecosystem of financial markets will begin to participate in Bitcoin, including broker-dealers, custodians, RIAs, and private banks, he said.

BlackRock’s own Bitcoin ETF, IBIT, set a new record on Friday, becoming the fastest fund in ETF history to cross the $10 billion threshold.

Among 417 other live BlackRock ETFs, IBIT has accounted for roughly half of this year’s inflows, according to Bernstein’s research.

The sudden shift could help fuel Bitcoin’s price, which Bernstein predicts will reach as high as $150,000 next year.

Other estimates see Bitcoin reaching as high as $500,000 over the next five years.

Crypto market movers

• Bitcoin dropped 2% since Monday, after briefly reaching a record high above $69,000 it fell to $65,200.
• Ethereum gained 3.6% to trade around $3,600.

What we’re reading

• Do Kwon wins appeal against extradition to US to face fraud charges — DL News.
• Bitcoin Hits $69,000: BTC Reaches New All-Time High — Milk Road.
• Some Coinbase Users See Zero Balances as Bitcoin Tops $68,000 — Unchained.
• Hector Network hits new legal snag that could cost investors more time and money — DL News
• Bitcoin’s Market Capitalization Hits All-Time High of $1.3 Trillion — Unchained
• Terraform Labs Fights Back Against SEC’s Counsel Payment Objections — Milk Road

Sebastian Sinclair is a markets correspondent for DL News. Have a tip? Contact Seb at sebastian@dlnews.com.