State Street Bank Predicts Soaring Cryptocurrency ETF Demand Will Outpace Precious Metal ETFs

According to a recent report by the Financial Times, State Street Bank anticipates that the increasing demand for cryptocurrency ETFs will soon lead to total assets in North America surpassing those of precious metal ETFs. This would position digital asset ETFs as the third largest asset class within the expansive $15 trillion ETF market, following only stocks and bonds. Frank Koudelka, the Global Head of ETF Solutions at State Street Bank, highlighted that the unforeseen growth in cryptocurrency ETFs reflects a burgeoning interest among financial advisors seeking to diversify portfolios with digital currencies. Notably, since the approval of the first spot cryptocurrency ETF in the U.S. last year, assets have surged to $136 billion, even amidst a downturn in the crypto market. State Street also forecasts that the SEC will greenlight additional digital asset ETFs this year, potentially enabling the listing of funds involving the top ten cryptocurrencies by market capitalization by 2025. Moreover, enhancements such as a “physical” creation and redemption mechanism for these ETFs could significantly improve trading efficiencies.