Cryptocurrency ETFs Expected to Surpass Precious Metals by Year-End

According to PANews, State Street, the world's largest ETF service provider, forecasts a surge in demand for cryptocurrency ETFs, predicting that their total assets will surpass those of North American precious metals ETFs by the end of this year. This shift will position digital token ETFs as the third-largest asset class in the $15 trillion ETF industry, following stocks and bonds, and ahead of real estate, alternative investments, and multi-asset funds. Frank Koudelka, Global Head of ETF Solutions at State Street, expressed surprise at the rapid growth of cryptocurrencies, noting, "I expected pent-up demand, but not at this magnitude." He anticipates continued rapid growth for cryptocurrency ETFs this year, highlighting increasing interest from investment advisors in incorporating cryptocurrencies into portfolios. Precious metals ETFs have had a 20-year head start, with the SPDR Gold Trust (GLD), the first physically-backed gold ETF launched in 2004, still being the largest precious metals ETF with $85 billion in assets. However, State Street expects the total assets of North American precious metals ETFs, currently at $165 billion, to be surpassed by cryptocurrency ETFs this year. State Street also predicts that the U.S. Securities and Exchange Commission (SEC) will approve more digital asset ETFs this year. In addition to existing Bitcoin and Ethereum ETFs, fund management companies have applied to launch ETFs based on various tokens, including SOL and XRP. State Street anticipates that by 2025, ETFs based on the top ten tokens by market capitalization will receive approval.