Now that exchange-traded funds (ETFs) are trading on major U.S. exchanges, top-tier 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, this could mean a massive influx of funds.
Blockchain expert Fiorenzo Manganiello expects that once the floodgates open, cryptocurrency ETFs will form 5% of hedge fund and pension fund portfolios by 2025.
As investors can now access Bitcoin in the same way they buy stocks, BlackRock’s (NYSE:) Bitcoin Spot ETF has amassed $16.7 billion in assets since its launch in January 2024.
Furthermore, the Ether ETF is on the verge of obtaining final approval from the US Securities and Exchange Commission (SEC) this summer.
“[W]”With BlackRock being a model for cryptocurrency adoption among institutional investors, one can only predict that others will follow suit. It's only a matter of time, and especially with the Ether ETF poised to continue to drive the market forward,” Manganiello told Investing.com.
Manganiello, co-founder and managing partner of LIAN Group, said that these regulatory developments will push institutional investors to increasingly incorporate cryptocurrencies into their portfolios.
“Cryptocurrency ETFs have been given the regulatory green light, and for an asset that has long been considered volatile and novel, this is a big step. Cryptocurrencies are starting to prove critics wrong; they have been granted regulatory legitimacy,” Manganiello said in an interview with Investing.com.
“These institutions will seek to tap into what has long been considered a “retail market,” diversify their assets, and embrace these innovative digital investments.”
LIAN Group, an investment firm focused on digital infrastructure, artificial intelligence, cryptocurrencies and blockchain, has invested over $500 million. One of its featured companies is Cowa, Europe’s largest renewable energy-powered blockchain infrastructure company.
Manganiello also highlighted the importance of institutional investors staying ahead of the curve by adopting “millennial wisdom” that 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.
