Investment advisers are set to surpass hedge fund managers in owning U.S.-listed spot Bitcoin (BTC) and Ether (ETH) exchange-traded funds (ETFs) next year, according to a new report by CF Benchmarks.
Launched on January 11, 11 spot BTC ETFs in the U.S. have garnered over $36 billion in investments, allowing investors to gain exposure to Bitcoin without the need to directly store or secure the asset. Hedge fund managers have been the primary investors, holding 45.3% of the total ETF shares, while investment advisers, who serve retail and high-net-worth clients, currently own 28%.
However, CF Benchmarks predicts that by 2025, investment advisers will surpass hedge funds, owning more than 50% of the BTC and ETH ETFs. This shift is expected as the $88 trillion U.S. wealth management sector increasingly embraces digital asset products, driven by rising client demand, improved understanding of cryptocurrencies, and the maturation of these investment vehicles. As a result, advisers are projected to exceed 2024’s record $40 billion in net inflows.
Already leading the ether ETF market, investment advisers are poised to continue expanding their dominance in 2025. Ethereum’s blockchain is expected to capitalize on the rising trend of asset tokenization, while Solana may gain market share if the U.S. regulatory landscape becomes clearer.
The report also anticipates that asset tokenization, especially tokenized real-world assets (RWAs), will grow significantly, with RWA tokenization potentially surpassing $30 billion by 2025. In the stablecoin market, new players like Ripple’s RLUSD and Paxos’ USDG could challenge Tether’s USDT, whose market share has grown from 50% to 70%.
As blockchain scalability faces greater challenges, the increasing adoption of digital assets, fueled by expected regulatory clarity under a potential Trump administration, may require blockchain capacity to scale to over 1,600 transactions per second (TPS). Additionally, the Federal Reserve’s likely shift toward dovish policies, including yield curve control and expanded asset purchases, could result in higher inflation expectations, which would strengthen the demand for hard assets like Bitcoin as a safeguard against monetary inflation.
