Bitcoin ETFs Poised To Capture Significant Market Share Within 3 Years: Report

Prominent brokerage firm Bernstein highlighted the potential impact of crypto exchange-traded funds (ETFs) on the market, emphasizing that such ETFs not only stimulate demand in the spot market but also act as a beacon of regulatory endorsement.

This, in turn, attracts both retail and institutional investors seeking a legitimate entry point into the crypto space. "With the interest of leading global asset managers in Bitcoin BTC/USD spot ETFs and potential mechanisms to address the U.S. Securities and Exchange Commission (SEC) objections, the probability of approval has risen,” stated the report, led by analyst Gautam Chhugani.

Bernstein projects that the spot Bitcoin ETF market could account for 10% of Bitcoin's market capitalization within the next two to three years. 

This projection comes at a time when the SEC is prolonging its evaluation of the Ark 21Shares Bitcoin ETF application. The regulatory body is also examining submissions from financial giants like BlackRock Inc BLK and Fidelity Investments.

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The report also emphasized the potential advantages of cryptocurrency ETFs, including robust promotional efforts by top-tier global asset managers and increased distribution from retail brokers and financial consultants.

Bernstein believes that the next wave of capital influx in the crypto domain will be driven by an increase in stablecoin supply, traditional asset tokenization, native crypto infrastructure tokenization, and ETFs.

The study further noted the current status of on-chain assets, mentioning, “On-chain assets have been stuck in a $40b range this year, and stablecoins in circulation at around $120b.”

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