By 2025, exchange-traded funds (ETF) in cryptocurrency will represent 5% of hedge fund and pension fund portfolios, according to the predictions of blockchain expert Fiorenzo Manganiello.
The predictions of the founder of LIAN Group on crypto ETFs
The intervention of the co-founder and managing partner of LIAN Group follows reports that BlackRock’s Bitcoin spot ETF has accumulated 16.7 billion dollars in assets since it was launched in January 2024 (Financial Times). Additionally, further cryptocurrency ETFs are about to enter the market, with the Ether ETF ready to obtain final approval from the United States Securities and Exchange Commission (SEC) this summer (Bloomberg).
LIAN Group is an investment company that builds and finances successful companies in various sectors, including digital infrastructure, artificial intelligence, cryptocurrency, and blockchain. Since its founding, the group has deployed over 500 million dollars of invested capital. One of the companies they have built is Cowa, the largest European blockchain infrastructure company that operates with renewable energy.
Manganiello, who is also a professor of blockchain technologies at the Geneva Business School, believes that these regulatory green lights will soon lead institutional investors, such as hedge funds and pension funds, to consider cryptocurrency as a valid asset. For Manganiello, it’s only a matter of time before these institutional players enter the crypto market, traditionally dominated by small investors.
The statements of Manganiello
“The crypto ETFs have obtained regulatory approval and, for an asset that has long been considered volatile and new, it is a big step. Cryptocurrency is starting to prove the critics wrong; it has obtained regulatory legitimacy. I do not deny that cryptocurrency has traditionally been seen as a retail market. But, with BlackRock entering the game and growing its spot ETF so quickly, it won’t be long before other institutions take the leap and invest in cryptocurrency. The approval of the Ether ETF will only be a catalyst.”
According to Manganiello, crypto can be highly profitable and institutional investors will certainly seek to take advantage of it while looking to diversify their assets. The co-founder of LIAN Group thinks that by the end of next year we will see crypto ETFs constitute a significant part, and at least 5%, of hedge fund and pension fund portfolios.
The role of crypto ETFs in institutional portfolios
The cryptocurrency ETFs offer a regulated and safer way for investors to access the cryptocurrency market. With the approval of ETFs by the SEC and the entry of large players like BlackRock, institutional interest is set to grow. Institutional investors are looking for ways to diversify their portfolios and achieve higher returns, and cryptocurrencies offer a unique opportunity in this regard.
Manganiello emphasizes that the adoption of these instruments by institutional investors not only further legitimizes cryptocurrencies, but could also stabilize the market, making it less volatile and more attractive to a wider range of investors.
With the increase in regulation and the growing interest of institutional investors, the cryptocurrency landscape is set to change radically. Cryptocurrency ETFs will not only offer new investment opportunities but will also help integrate cryptocurrencies into the traditional financial system.
In conclusion, Manganiello’s forecasts reflect an emerging trend that could redefine the way institutional investors manage their portfolios. By 2025, cryptocurrency ETFs could constitute a significant part of the investment strategies of hedge funds and pension funds, marking a new era for cryptocurrencies in the world of finance.