Alliance Bernstein (AB), a leading $646 billion asset manager, has predicted that the bitcoin and cryptocurrency fund management industry is poised for remarkable growth, potentially reaching a staggering $650 billion in the next five years.
This forecast comes on the heels of recent developments that have bolstered the prospects for institutional adoption of bitcoin by Wall Street firms.
AB estimates the current size of the crypto fund management sector to be approximately $45 billion to $50 billion. However, company analysts maintain that this figure has the potential to rise to more than $500 billion in assets by 2028. This transformation would mean a transition from what AB calls a “cottage industry” to a management sector. of fully formalized and regulated assets.
The projected demand driving this growth is expected to come from a variety of sources, including investment advisors, wealth management services, private banking products, and the increased accessibility of bitcoin exchange-traded funds (ETFs) through broker-dealer accounts. direct.
According to AB, achieving this ambitious goal would require bitcoin ETFs to capture a 10% share of the total market capitalization of both bitcoin and ethereum, while liquid crypto hedge funds would account for between 5% and 6%.
Crucially, recent developments have significantly improved the prospects for bitcoin ETFs. Traditional financial heavyweights like Blackrock and Fidelity, along with others, have filed for bitcoin ETFs. Additionally, court decisions, particularly the Grayscale case, have urged the US Securities and Exchange Commission (SEC) to re-evaluate its stance on crypto ETFs.
AB now believes that the likelihood of SEC approval in early 2024 has increased substantially.
Additionally, AB analysts highlighted the growing importance of stablecoins and noted their critical role in payments adoption. They emphasized the possible transformation of stablecoins from unregulated offshore cryptoassets to regulated instruments with broader utility in conventional payments and global settlements.
These predictions align with previous reports from AB Bernstein, which indicated that the recent GBTC ruling was a major step forward and that a bitcoin spot ETF could gain approval between mid-October and mid-March 2024.
