Crypto ETFs to Surpass Precious Metal ETFs in US: State Street

A recent State Street analysis revealed that Bitcoin and Ethereum exchange-traded funds (ETFs), those that are in action, would potentially surpass those of precious metal ETFs in North America this year.

In the ‘2025 Global ETF Outlook,’ the banking giant predicted that current crypto funds will expand to multi-coin products. It added that digital asset ETF asset under management (AUM) “will grow larger than” that of precious metals by 2025.

This would make crypto ETFs as the third-largest asset class in the $15 trillion ETF industry.

“Additional ecosystem members will gain comfort with trading digital asset products, and combined with regulatory easing, will pave the way for the approval of in-kind capabilities for digital assets,” State Street forecasted.

Frank Koudelka from State Street, noted that more advisers are showing interest in crypto products.

“We have been very surprised by the speed of growth of crypto. I expected there to be pent up demand, but I didn’t expect it to be as strong as it was.”

State Street’s 2025 Crypto Predictions ($4.7T AUM):

• The top 10 coins by market cap will have a spot ETF in 2025.

• Crypto ETFs will expand far beyond BTC and ETH.

• Digital asset ETFs will surpass precious metals ETFs by the end of 2025.

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Next Wave of Altcoin ETFs

Following the spot Bitcoin and Ethereum ETF approvals last year, several altcoin fund filings have been made recently. These filings particularly arrived after ex-SEC chair Gensler’s resignation, hoping that the doors would open for spot altcoin ETF approvals.

Further, spot crypto exchange-traded funds have already amassed $136bn, even after the crypto sell-offs last month.

James Toledano, Chief Operating Officer at Unity Wallet, told Cryptonews that 2025 would be a breakout year for altcoin ETFs.

“Altcoin ETFs have genuine potential to attract capital, especially if supported by innovation-friendly policies with the new incoming U.S. administration.”

However, Toledano added that their success may be less consistent compared to Bitcoin products “due to the seemingly episodic nature of interest in altcoins.”

Precious Metals Funds Have 20-Year Head Start

Per State Street predictions, around $165 billion held by North American precious metal exchange-traded funds, will be overhauled this year.

Notably, precious metals have a 20-year first-mover advantage. The world’s first physically-backed gold fund, the $85 billion SPDR Gold Trust (GLD) was launched in 2004, and remains the largest.

Precious metals funds cover gold, silver, platinum or palladium. They provide exposure either through commodity futures targeting those metals or by physically owning the targeted asset.