Next year promises to be even better for crypto exchange-traded funds.
Kraken’s head of strategy, Thomas Perfumo, told DL News that he expects inflows to double to $50 billion in 2025.
“I don’t really see anything holding back the big increase in demand, and possibly even seeing early signs of really ultra big kind of final boss allocators like sovereign wealth funds, endowments, and pension funds,” he said.
Large asset managers are talking about 1% to 3% portfolio allocations to crypto, he added.
Demand is helped by key ETF providers like Blackrock and Fidelity, which have helped mainstream crypto while keeping costs and risk down.
The popularity of Bitcoin ETFs has been nothing short of astounding.
Bitcoin holdings for the 11 providers top $90 billion, according to Dune Analytics, and they now control more than 5% of Bitcoin’s total supply.
US Election
Another key catalyst for more demand for Bitcoin is Donald Trump’s electoral victory.
“The potential clarity that we’ve just achieved with the US election outcome lends a lot of comfort to people who’ve been concerned about what it might look like for 2025, and this was a big break for them,” said Perfumo.
The Kraken executive views the near-vertical ascent in Bitcoin’s price as “the industry digesting how quickly we might be able to move in the US,” he said.
Trump offered a number of promises to the digital assets industry. These included building a strategic reserve stockpile of Bitcoin, firing SEC chairman Gary Gensler, creating stablecoin legislation, and more.
Ethereum ETF
Still, the second cryptocurrency to become a mainstream financial product has been slower to grow.
“Ethereum has a little bit more complexity to it,” explained Perfumo, comparing how enthusiasts describe its deeply technical characteristics to the “easy narrative” of Bitcoin.
“The story for investors is more difficult to wrap their heads around.”
That said, Ethereum bucked its negative streak.
More than $648 million has flowed into the asset in the past five trading sessions, with spot Ethereum ETFs now registering $95 million net inflows since launch.
Perfumo says he envisions a natural progression in Bitcoin dominance dropping eventually, and capital flowing into alternative assets like Ethereum.
“I do see reasons to be bullish.”
