Bitcoin ETF Approval Prospects Brighten as Crypto Fund Industry Set to Soar

The crypto fund management industry could potentially reach an impressive $650 billion within the next five years, according to a prediction by Alliance Bernstein (AB), a leading asset manager overseeing $646 billion in assets. This forecast was released on Tuesday, following recent events that have improved the outlook for institutional adoption of Bitcoin by Wall Street firms.

Currently, AB estimates that the size of the crypto fund management sector is around $45-50 billion. However, analysts from the firm believe that this number could grow to exceed $500 billion in assets by 2028. To achieve this ambitious target, Bitcoin exchange-traded funds (ETFs) would need to secure a 10% share of the total market capitalization of Bitcoin and related assets, while liquid crypto hedge funds would need to represent 5-6%.

Recent developments have significantly enhanced the prospects for Bitcoin ETFs. Major financial institutions, including notable names in the industry, have submitted applications for Bitcoin ETFs. Additionally, recent court rulings, particularly in the Grayscale case, have prompted the U.S. Securities and Exchange Commission (SEC) to reconsider its stance on crypto ETFs. AB now believes that the chances of SEC approval by early 2024 have increased notably.

On the same day, Mike Belshe, CEO of the crypto custodian BitGo, shared his perspective on the delay in the SEC’s approval of a spot Bitcoin ETF during an interview. He attributed the holdup to political influences rather than legal challenges, indicating that while laws remain unchanged, the rules have adapted due to political pressures in Washington.

Belshe stressed the need for “predictable and understandable” regulations to ensure America’s economic competitiveness and safeguard the status of the U.S. dollar as the global reserve currency. He advocated for clarity in regulation that remains consistent across different administrations.

These predictions and insights emerge as the crypto industry experiences considerable growth and transformation. The changing landscape indicates that heightened institutional adoption and clearer regulations could further propel the sector’s expansion in the years ahead.