Bloomberg’s exchange-traded fund (ETF) analyst James Seyffart believes that the next phase of adoption of crypto asset ETFs will be driven by financial advisors, large brokerage firms and brokers who manage assets for high-net-worth individuals.
Speaking on the “Coin Stories” podcast, Seyffart outlined how these financial institutions, which manage trillions of dollars in assets, play a central role in expanding the BTC ETF market.
He pointed out that the BTC ETF's first year in the market has been exceptionally strong, exceeding the expectations of many analysts. Although Bloomberg is optimistic about the BTC ETF, he admitted that the actual performance exceeded their predictions.
“We’ve seen some outflows in recent weeks, but they’ve only lost about $40 billion at their peak since launch, and these ETFs now have about $110 billion in assets,” Seyffart said. “IBIT has been one of the most actively traded ETFs, reaching $50 billion in just a hundred days, and the previous record took over a thousand days. So they’ve broken every record that you can look at.”
Given this momentum, he believes that using the BTC ETF as a tool for portfolio allocation for high-net-worth clients could drive its continued success.
While big firms like BlackRock recommend allocating 1% to 2% of BTC in a portfolio, Seyffart stressed that “big brokerage firms and big banks” don’t allow investors to buy crypto asset ETFs.
He added that these brokerage firms, financial advisors and brokerage platforms control a large amount of money, including that of billionaires.
These institutions influence asset allocation decisions across a broad range of financial portfolios. If these institutions start including BTC ETFs as part of their portfolios, such as 5%, this could drive continued growth in adoption, Seyffart said.
In addition to institutional adoption, Seyffart also noted a trend of companies, states, and even countries incorporating BTC into their balance sheets. This helps to enhance the legitimacy and stability of BTC as an asset class in the traditional financial sector.
However, he stressed that increased acceptance among financial intermediaries could be a key driver of ETF growth.
Today, asset management company Grayscale released a report claiming that high-net-worth investors have become interested in Crypto assets.
Grayscale CEO Peter Mintzberg said on social media: “It’s great to see that the momentum of Crypto assets is shifting, and more and more investors are beginning to recognize the value of digital assets. It is worth noting that 38% of high net worth investors believe that their portfolios will include Crypto assets in the future.”
