The Bitcoin and crypto fund management industry could potentially reach a staggering $650 billion within the next five years, according to a prediction by Alliance Bernstein (AB), a prominent asset manager with $646 billion under management. This forecast was published on Tuesday, following recent developments that have boosted the outlook for institutional adoption of Bitcoin by Wall Street firms.
Currently, AB estimates that the size of the crypto fund management sector stands at approximately $45-50 billion. However, the firm's analysts argue that this figure has the potential to balloon to over $500 billion in assets by 2028. Achieving this ambitious goal would necessitate Bitcoin exchange-traded funds (ETFs) capturing a 10% share of the total market capitalization of both Bitcoin and Ethereum, while liquid crypto hedge funds would account for 5-6%.
Recent developments have significantly improved the prospects for Bitcoin ETFs. Traditional financial heavyweights such as Blackrock (NYSE:BLK) and Fidelity have filed Bitcoin ETF applications. Furthermore, court decisions, particularly the Grayscale case, have urged the U.S. Securities and Exchange Commission (SEC) to reevaluate its stance on crypto ETFs. AB now believes that the likelihood of SEC approval by early 2024 has substantially increased.
On the same day, Mike Belshe, CEO of crypto custodian BitGo, shared his views on why a spot Bitcoin ETF has yet to be approved by the SEC in an interview with Kitco News. Belshe attributed the delay to political influences rather than legal issues. He stated that despite no changes in laws, rules have shifted due to political pressures within Washington.
Belshe emphasized that "predictable and understandable" rules are necessary for maintaining America's economic competitiveness and protecting the US dollar's status as the global reserve currency. He argued for clear regulation that remains consistent across administrations.
These predictions and viewpoints come at a time when the crypto industry is witnessing significant growth and development. The evolving landscape suggests increased institutional adoption and regulatory clarity could further boost the sector's expansion in the coming years.
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