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.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

Maple Finance has successfully navigated significant market challenges through its strategic pivot to secured lending (Maple v2) and the launch of its Syrup product. Syrup has become a primary growth driver, delivering sustainable, outperforming stablecoin yields and rapidly increasing TVL. The upcoming custody-first Bitcoin staking product (istBTC) presents another significant avenue for expansion. Crucially, Maple has achieved operational profitability, a key inflection point that, combined with a fully vested token and active buyback mechanism, strengthens its investment case. While valuation metrics suggest potential undervaluation relative to peers and growth, the primary forward-looking risk identified is the long-term sustainability of its current high-take-rate collateral staking revenue model.

article-image

What was a cool $500,000 would now be worth more than $7 million

article-image

Mersinger’s final day at the CFTC will be May 30

article-image

Squads CEO Stepan Simkin explained why the firm launched Altitude and how he’s thinking about stablecoins

article-image

Sponsored

Instead of endless wallet popups, users could connect once, set clear rules, and delegate permission to an app or to an AI agent.

article-image

Prediction markets show that people bet in anticipation of things happening far too often

article-image

The agency’s final deadline is in October