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Crypto ETFs to account for 5% of hedge and pension fund portfolios by 2025

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Cryptocurrency exchange-traded funds (ETF) will form 5% of hedge fund and pension fund portfolios by 2025, according to blockchain expert Fiorenzo Manganiello, the Co-Founder and managing partner of direct investment firm LIAN Group.

Manganiello’s prediction comes after the Financial Times reported that BlackRock’s spot bitcoin ETF has accumulated $16.7bn of assets since it launched in January 2024. Increasing numbers of cryptocurrency ETFs are also due to enter the market, with the ether ETF set to gain final approval from the US’ Securities and Exchange Commission (SEC) this summer, according to Bloomberg.

Manganiello, who also serves as a professor of blockchain technologies at Geneva Business School, believes these regulatory greenlights will soon lead institutional investors, such as hedge funds and pension funds, to view cryptocurrency as a viable asset. For Manganiello, it’s only a matter of time until these institutional players muscle into the crypto market, which has traditionally been dominated by retail investors.

“Crypto ETFs have been given the regulatory green light and, for an asset that has long been considered volatile and novel, it’s a big step,” he said. “Crypto is beginning to prove the critics wrong; it’s been given regulatory legitimacy.

“I won’t deny that crypto has traditionally been seen as a retail market. But, with BlackRock stepping in and growing its own spot ETF so quickly, it won’t be long until other institutions take the leap and invest in crypto. The ether ETF approval will only be a catalyst.

“That’s why I think by the end of next year we’ll see crypto ETFs form a decent chunk, and at least 5%, of hedge fund and pension fund portfolios.

“At the end of the day, it’s incredibly important for institutional investors to stay ahead of the curve. They have to adopt what I’d call a “millennial savviness”, an approach that embraces emerging, innovative alternative investments – and isn’t bogged down with preserving the status quo. With crypto, it’s no different; institutional investors, like hedge funds and pension funds, have to be ready to consider crypto as an asset – and especially with crypto ETFs quickly gaining approval.”

LIAN Group focuses on investments in companies across multiple industries, including digital infrastructure, AI, cryptocurrency and blockchain. Since launch, it has deployed over $500m of invested capital.

 

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