The crypto asset management industry is a sector on the cusp of a growth spurt, according to a team of analysts at Bernstein Research. Their projections highlight an optimistic future for the industry, predicting an increase from the current $50 billion valuation to between $500 billion and $650 billion within the next five years.
Certain catalysts are expected to trigger this monumental growth, one of which is the prospective approval of a spot Bitcoin (BTC) exchange-traded fund (ETF). This came into focus after a recent ruling by the US Court of Appeals for the District of Columbia Circuit directed the SEC to reconsider its initial denial of Grayscale‘s ETF application, with no justification for approving Bitcoin futures-based ETFs while simultaneously denying spot Bitcoin ETFs. If the SEC refrains from opposing this move, Bitcoin ETFs may be launched by 2024.
The Bernstein research team anticipates ETFs accounting for around 10% of the market capitalizations of Bitcoin and Ether. The prediction is further substantiated with influential financial organizations, namely BlackRock, Fidelity, WisdomTree, and Invesco, demonstrating a keen interest in launching Bitcoin ETFs. Moreover, industry leaders like PayPal Holdings and Visa have either released their tokens or teamed up with other companies to increase their crypto involvement.
This aggressive growth forecast, however, is not without its scepticism rooted in regulatory hurdles. Despite the SEC’s recent setback in the courtroom, SEC Chair Gary Gensler retains a cautious approach, citing instances of fraud and noncompliance with securities laws as major flaws within the crypto industry. Gensler even suggested that the crypto market, beyond individuals, could jeopardize the broader financial system by hurting investor faith, thus shaking the foundations of finance built predominantly on trust.
Despite regulatory uncertainties, Bernstein analysts opine that the harshest part of the regulatory backlash is behind us, thus broadening our perspective. Pointing to the ongoing court case with Coinbase, they believe it will provide requisite clarity and help carve a path forward, igniting another era of optimistic growth. Whether these robust growth predictions pan out, or whether regulatory roadblocks will keep the industry in check remains to be seen. Meanwhile the crypto-sphere continues to evolve at a blistering speed leaving spectators both thrilled and cautious.
Source: Cryptonews
