Analysts at State Street have forecasted that crypto exchange-traded funds (ETFs) will surpass precious metals to become the third-largest ETF asset class in the US by the end of 2025, trailing only behind equities and bonds.
According to a Financial Times report dated 3 March 2025, Frank Koudelka, global head of ETF solutions at State Street said, “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 data is showing more advisers are interested in cryptocurrencies as part of their portfolios.”
When it comes to North America, the State Street report said that “spot crypto products will expand to cover the top 10 coins based on market cap.”
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State Street Predicts Crypto ETFs to Surpass Precious Metals by 2025:
State Street forecasts that cryptocurrency exchange-traded funds (ETFs) will surpass precious…— ML Tech (@MLTech) March 3, 2025
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BlackRock, Fidelity Emerged As Dominant Players In Space Of Crypto ETFs
As of late February 2025, the crypto ETF landscape in the US has already shown impressive growth. A total of 39 crypto ETFs have collectively amassed approximately $100 billion in assets.
BlackRock and Fidelity have emerged as dominant players in this space. Their crypto ETFs holding is over $57 billion and $20 billion, respectively.
For comparison, North American precious metal ETFs, including the $85 billion SPDR Gold Trust, currently hold a combined $165 billion.
State Street’s forecast isn’t limited to asset growth alone. The financial institution also anticipates significant regulatory developments that could further accelerate the expansion of crypto ETFs.
Furthermore, the report revealed that ETF share classes will not launch in 2025. They expect first products in the first half of 2026. “This is not due to lack of desire. Latency with administration change and planning regulatory priorities will push this just over the line into 2026 (We hope we’re wrong!),” the report said.
Furthermore, according to the analysts, ETF share classes will receive a similar blanket approval as digital assets received for all filers that stay aligned with regulator comments/requirements, instead of individual approvals.
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“European ETF Market Will Grow By 25%, Surpass $2.8 trillion In Assets”
When it comes to Europe, the analysts at State Street said that the European ETF market will grow by at least 25% and surpass $2.8 trillion in assets.
Furthermore, they expect new product launches will exceed 400.
“Actively managed ETFs will have the highest percentage of overall launches,” the report said.
In the last two years, ETFs have increased from 9.5 percent to 15.5 percent of the mutual fund market.
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Key Takeaways
- As of late February 2025, the crypto ETF landscape in the US has already shown impressive growth. A total of 39 crypto ETFs have collectively amassed approximately $100 billion in assets.
- If State Street’s predictions materialize, the crypto ETF market will have demonstrated extraordinary growth in a relatively short period since the approval of spot Bitcoin ETFs.
