Crypto ETFs Set to Overtake Precious Metals by 2025

Crypto ETFs poised to become the third-largest asset class in the U.S. by end-2025, according to State Street's forecast.

State Street analysts predict that crypto ETFs will surpass precious metals in North America by the end of 2025, solidifying their position as the third-largest ETF asset class, behind equities and bonds. This growth is driven by pent-up demand, which has surprised industry experts like Frank Koudelka, State Street's global head of ETF solutions.

State Street anticipates that the U.S. Securities and Exchange Commission (SEC) will approve ETFs based on altcoins in 2025, opening up new opportunities for the crypto ETF market. Additionally, the bank predicts that the SEC will allow "in-kind" trading for crypto ETFs, enabling transactions in crypto instead of cash.

As of late February, U.S. crypto ETFs had amassed around $100 billion, with BlackRock and Fidelity being the largest players, holding over $57 billion and $20 billion in their crypto ETFs, respectively. In comparison, North American precious metal ETFs, including the $85 billion SPDR Gold Trust, hold a combined $165 billion. However, State Street analysts expect crypto ETFs to surpass this amount this year.