Bernstein analysts eye potential bitcoin ETF approval by ‘early 2024’

Bernstein estimates crypto will mature from a ‘cottage industry’ to an asset management industry

article-image

Kanchanara/Shutterstock modified by Blockworks

share

Bernstein estimates the crypto fund management industry to be around $45-50 billion currently, though it has the ability to be worth over $500 billion of assets in the next five years.  

Analysts said in a research note on Monday they believe the crypto industry is on track to “transition from a cottage industry ($50 billion of managed assets) to a formal, regulated asset management industry with $500-650 billion of assets over the next 5 years.”

The demand, Bernstein said, would come from investment advisors, wealth and private banking products as well as the ability to easily access bitcoin ETFs in direct broker accounts. 

“This would imply a 10% ETF share for bitcoin and ETH market cap, and 5-6% share for liquid crypto hedge funds,” they wrote.

The bitcoin ETF filings from traditional heavyweights Blackrock, Fidelity, and others, have significantly improved chances for a bitcoin ETF, and two courts have sided — or partially sided, in the case of Ripple — with crypto companies. 

Thanks to the Grayscale case, in which a panel of judges asked the SEC to review Grayscale’s application to convert its Bitcoin Trust (GBTC) to a bitcoin ETF, Bernstein now says it believes that “the chances of an approval by early 2024 has significantly increased, and thus [they] like the risk-reward setup from here…”

The SEC, in late August, delayed a set of bitcoin ETF decisions to October. 

Rather than “inventing another reason for refusal,” analysts believe the SEC will go the “middle route” and get comfortable with the surveillance sharing agreement with Coinbase since the proposals are being made by traditional fund managers and the agreements are with regulated exchanges, such as Nasdaq. 

“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein,” the SEC said at the time. It delayed decisions on Blackrock, Fidelity, Ark, Bitwise and VanEck, among others.

Following the delay, Franklin Templeton announced its bid for a spot bitcoin ETF.

Additionally, analysts at Bernstein noted that stablecoins have led tokenization opportunities with payments adoption. 

“…The use case has been largely crypto trading and DeFi markets, with no major integration with mainstream payments platforms and networks. We believe the real opportunity in stablecoins today is in its transformation from offshore-unregulated-crypto to onshore, regulated and more direct utility around mainstream payments and global settlement,” analysts wrote.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

USDai is a synthetic dollar fully backed by tokenized three‑month T-bills custodied by M^0. When holders stake USDai in an ERC-4626 vault, they mint sUSDai, which finances short-term, amortizing loans secured by NVIDIA-class GPUs and servers.

article-image

After a jittery few months, recent economic data is hinting at a resilient economy that is beginning to re-accelerate

article-image

The stablecoin bill now heads to the president’s desk

article-image

The House on Thursday passed the CLARITY Act, a landmark cryptocurrency market structure bill

article-image

Interchain Labs will focus on sovereign L1s and institutional demand, abandoning plans for smart contracts on the Cosmos Hub

article-image

Also, only three tokens have outperformed bitcoin so far this year: XMR, HYPE and SKY

article-image

The fund group has submitted proposals in recent months for other funds that would hold litecoin, solana, XRP, HBAR, Sui and others