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Cryptocurrency ETFs to Make Up 5% of Hedge Fund Portfolios by 2025
Now that exchange-traded funds (ETFs) are trading on major U.S. exchanges, major asset managers who were previously unable to access cryptocurrencies now have a way to invest in the original cryptocurrency.
For the $30 trillion wealth management industry, that could mean a massive influx of funds.
Blockchain expert Fiorenzo Manganiello predicts that once the floodgates open, cryptocurrency ETFs will account for 5% of hedge fund and pension fund portfolios by 2025.
Because investors can now access Bitcoin the same way they buy stocks, BlackRock’s (NYSE:) spot Bitcoin ETF has amassed $16.7 billion in assets since its launch in January 2024.
Additionally, the Ether ETF is poised to receive final approval from the U.S. Securities and Exchange Commission (SEC) this summer.
“[W]“With BlackRock setting the standard for cryptocurrency gathering among institutional investors, one can only expect others to follow. It’s only a matter of time, too, and especially with the Ether ETF poised to further advance the market,” Manganiello told Investing.com.
Manganiello, co-founder and managing partner of LIAN Group, said these regulatory advances will push institutional investors to increasingly incorporate cryptocurrencies into their portfolios.
“Cryptocurrency ETFs have received regulatory green light, and for an asset that has long been considered volatile and new, that’s a big step. Cryptocurrencies are starting to prove the critics wrong; they’ve received regulatory legitimacy,” Manganiello said in an interview with Investing.com.
“These institutions will seek to capitalize on what has long been considered a ‘retail market,’ diversify their assets, and open the door to these innovative digital investments.”
LIAN Group, an investment firm involved in digital infrastructure, AI, cryptocurrency and blockchain, has deployed over $500 million in invested capital. One of their notable ventures is Cowa, Europe’s largest blockchain infrastructure company powered by renewable energy.
Manganiello also stressed the importance for institutional investors to stay ahead of the curve by embracing “millennial savvy,” which embraces emerging alternative investments.
“Institutional investors, such as hedge funds and pension funds, need to be prepared to consider cryptocurrencies as an asset, especially now that cryptocurrency ETFs are rapidly gaining approval,” he noted.