Investment advisers are expected to surpass hedge funds as the largest holders of US-listed spot bitcoin (BTC) exchange-traded funds (ETFs) in 2025, according to a report by CoinDesk citing CF Benchmarks.
Since their launch on 11 January 2024, a total of 11 spot BTC ETFs have given investors a way to gain exposure to bitcoin without directly owning or storing it, and have already attracted over $36bn in investments.
Currently, hedge funds dominate the market, holding 45.3% of the total ETF assets, while investment advisers, who manage retail and high-net-worth capital, are in second place with 28%.
However, CF Benchmarks predicts this will change in 2025, forecasting that investment advisers will control more than 50% of both the BTC and ether (ETH) ETF markets. CF Benchmarks, a UK-regulated index provider responsible for key digital asset benchmarks like the BRRNY, says this shift will be driven by growing demand from clients, a deeper understanding of digital assets, and the maturation of these investment products.
“We expect investment advisor allocations to rise beyond 50% for both assets, as the $88tn US wealth management industry begins to embrace these vehicles, eclipsing 2024’s combined record-breaking $40bn in net flows,” CF Benchmarks’ said in an annual report cited by CoinDesk.
Investment advisers are already the leading players in the ether ETF market and are likely to extend this dominance in 2025.
Ethereum, the blockchain behind ether, is expected to benefit from the rising popularity of asset tokenisation, while solana may continue to gain ground due to potential regulatory clarity in the US.
The report also forecasts that the tokenisation of real-world assets (RWAs) will gain momentum, potentially surpassing $30bn by 2025. In the stablecoin market, new entrants such as Ripple’s RLUSD and Paxos’ USDG are predicted to challenge Tether’s USDT, which has seen its market share grow from 50% to 70%.
Furthermore, the scalability of blockchain networks will face increasing pressure as active user adoption rises, especially under the expected regulatory clarity from President-elect Donald Trump’s administration. The report suggests that blockchain capacity could need to double to more than 1,600 transactions per second (TPS) to keep up with demand.
Finally, the report anticipates that the Federal Reserve will adopt a dovish stance, potentially utilising measures like yield curve control or expanded asset purchases to address the rising debt burden and weak labour market.
This could repotedly elevate inflation expectations and drive greater interest in hard assets like Bitcoin as a hedge against monetary debasement.
