State Street Forecasts Crypto ETFs to Overtake Precious Metals by 2025

Analysts at State Street have made a bold prediction, forecasting that cryptocurrency exchange-traded funds (ETFs) will surpass precious metals in North America by the end of 2025, cementing their position as the third-largest ETF asset class.

Surprising Growth in Crypto ETFs

According to Frank Koudelka, State Street’s global head of ETF solutions, the growth of crypto ETFs has been faster than expected. “We have been very surprised by the speed of growth of crypto. I expected there to be pent-up demand, but I didn’t expect it to be as strong as it was,” he said.

The forecast is based on the assumption that the U.S. Securities and Exchange Commission (SEC) will allow ETFs based on altcoins in 2025. State Street also predicts that the SEC will approve “in-kind” trading for crypto ETFs, allowing transactions in crypto instead of cash.

Crypto ETF Market Size and Key Players

As of late February, a total of 39 crypto ETFs in the U.S. have amassed around $100 billion. The largest players in the market are BlackRock and Fidelity, holding over $57 billion and $20 billion, respectively, in their crypto ETFs.

In comparison, North American precious metal ETFs, including the $85 billion SPDR Gold Trust, hold a combined $165 billion. However, analysts at State Street expect crypto ETFs to surpass this amount by the end of 2025.

Tips for Investors

If you’re considering investing in crypto ETFs, here are a few things to keep in mind:

  • Do your research: Understand the difference between various types of crypto ETFs and the underlying assets they track.
  • Diversify your portfolio: Spread your investments across different asset classes to minimize risk.
  • Stay up-to-date: Keep an eye on regulatory developments and market trends to make informed investment decisions.

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