Growing institutional demand and a change in US policy could see assets under management in crypto ETPs surpass $120 billion within the next six years, according to a recently published report.
Bloomberg Intelligence’s (BI’s) 2022 Crypto Outlook states that a key catalyst will be approval from the US Securities and Exchanges Commission for a spot bitcoin ETF.
Should this happen by the end of 2023, the regulatory clarity it would provide would likely lead to tens of billions in assets added to the crypto funds space, states the report.
BI estimates that there are at least 107 crypto funds with 119 share classes listed on public exchanges globally. But while this shows that fund issuers believe there is massive potential in the asset class, the absence of an approved spot option in the US, the world’s biggest ETF market, this potential will not be fully realised.
James Seyffart, ETF strategist at BI said: “The number of publicly listed cryptocurrency funds – mostly tracking bitcoin and ethereum – should sustain the rapid growth of the past two years through 2022 and into 2023 as more countries allow the launch of spot products and regulators get more comfortable with digital assets.
“In the US, regulatory concern is the top reason advisors haven't invested in crypto assets. We believe a Bitcoin ETF approval would alleviate these concerns,” he added.