Bitcoin ETFs are projected to attract hundreds of billions in investment.
Experts believe the cryptocurrency ecosystem has significant growth potential. Acquisitions and infrastructure developments are drawing attention from institutional investors. They see the crypto market as still in its early days, with capital flows set to drive major innovation.
According to Devin Ryan, managing director at JMP Securities, institutional investment is about to see a massive influx. He estimates that hundreds of billions of dollars could flow into the market over the next few years.
In an interview with CNBC, Ryan pointed out the evolving regulatory landscape. He highlighted how increasing acceptance of Bitcoin exchange-traded funds (ETFs) is a key factor for growth.
“We have research showing that $220 billion in assets are expected to enter Bitcoin ETFs in the next three years,” Ryan said. “If there’s a strategic reserve, that could mean hundreds of billions of dollars going into Bitcoin.”
Ryan also noted a surge in trading volumes on platforms like Coinbase Inc. and Robinhood since the recent U.S. presidential election. For instance, Coinbase's trading volumes have tripled, indicating growing interest in the sector.
This activity is unlocking a lot of innovation that was previously held back. Ryan sees potential for significant growth in payments, remittances, stablecoins, and Web3 applications.
Sarah Kunst, managing director at Cleo Capital, shares Ryan’s optimism. She believes institutional money has been waiting for clearer regulatory guidelines before entering the market.
Kunst emphasized that the new U.S. administration might have a more favorable stance on mergers and acquisitions (M&A), which could drive growth in the ecosystem.
“I think there are people and institutions who haven’t jumped in yet but are eager to get started,” she said. “This is really crypto’s third act.”
Kunst identified key players in the industry, like crypto exchanges and infrastructure firms. These companies are likely targets for larger financial institutions looking to acquire.
“Names like FalconX, the crypto prime brokerage, and Gemini, the crypto marketplace, are likely to attract attention from big buyers,” she stated.
While Bitcoin remains a focal point for institutional interest, Kunst sees a broader investment focus emerging. She warns that meme coins can be risky. “You can make a lot, but you can also lose everything,” she cautioned.
Instead, she suggests looking at stablecoins and cryptocurrency ETFs as safer options. These are especially appealing for institutions that can’t hold crypto directly.
Ryan reinforced this outlook, stressing the importance of capital flows. “Follow the flows, and they’re still coming in—we’re just getting started,” he said.
Beyond Bitcoin ETFs, Ryan expects tens of billions of dollars to flow into other crypto tokens as regulatory uncertainty fades. This shift will spur innovation and further investment in the space.
Charles Schwab is also gearing up to enter the spot cryptocurrency trading market under new leadership.