Analyst: Crypto ETFs to form 5% of hedge fund by 2025

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As a researcher with a background in finance and experience following the crypto market, I wholeheartedly agree with Manganiello’s prediction that crypto ETFs will comprise 5% of hedge fund and pension fund portfolios by 2025. The regulatory approvals for BlackRock’s spot bitcoin ETF and the impending approval of the Ether ETF are clear signs that institutional investors are taking crypto seriously as a legitimate asset class.

According to Fiorenzo Manganiello, a well-known blockchain authority, it’s anticipated that by the year 2025, crypto exchange-traded funds (ETFs) will make up approximately 5% of the holdings in hedge funds and pension funds.

Manganiello, a partner at LIAN Group and one of its co-founders, made this prediction based on BlackRock’s spot bitcoin ETF amassing an impressive $16.7 billion in assets since its debut in January 2024. Furthermore, the SEC is anticipated to grant approval for the Ether ETF during the summer season.

Manganiello posits that securing regulatory approvals will attract institutional investors to the cryptocurrency market. Previously, individual investors held significant sway in this domain. However, recent developments have positioned crypto as a promising investment opportunity for hedge funds and pension funds.

“Regulators have approved the launch of crypto Exchange-Traded Funds (ETFs), marking a significant milestone for this once-volatile and novel asset class. Crypto is now demonstrating its critics wrong by securing regulatory endorsement.”

As an analyst, I’ve observed that the swift expansion of BlackRock’s bitcoin spot ETF is a telling sign. Previously, cryptocurrencies were perceived as primarily catering to retail investors. However, with BlackRock making such a rapid entry and expanding its own ETF so quickly, it won’t be long before other institutional investors follow suit and invest in crypto. The approval of an Ether spot ETF is merely going to accelerate this trend.

Profitability

Manganiello underscored the financial potential of cryptocurrencies and advised institutional investors to consider expanding their investment portfolios with these digital assets.

Institutional investors are increasingly drawn to cryptocurrencies due to their profitability. By the end of next year, I predict that crypto Exchange-Traded Funds (ETFs) will account for a significant portion, at least 5%, in hedge funds and pension fund investments as part of their asset diversification strategies.

He also highlighted the importance of adaptability for institutional investors. 

In today’s rapidly changing economic landscape, it is essential for institutional investors to keep abreast of new trends. They need to adopt a forward-thinking attitude, open to exploring cutting-edge, alternative investment opportunities, rather than clinging to traditional methods.

From an analytical standpoint, it’s essential for institutional investors, including hedge funds and pension funds, to be ready to incorporate crypto into their asset allocation strategies. With the increasing approval of crypto Exchange-Traded Funds (ETFs) by regulatory bodies, the financial terrain is on the brink of undergoing substantial transformations. Consequently, cryptocurrencies are set to become a standard component in institutional investment portfolios, necessitating their careful consideration.

An investment firm named LIAN Group, which specializes in backing businesses spanning sectors such as digital infrastructure, artificial intelligence, cryptocurrency, and blockchain, has poured more than half a billion dollars into projects since its establishment. Among its significant undertakings is Cowa, Europe‘s largest blockchain infrastructure company that runs on renewable energy.

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2024-07-08 21:52