Kraken's Thomas Perfumo Predicts Crypto ETF Inflows to Double to $50 Billion by 2025, Driven by Institutional Interest and U.S. Election Clarity

Thomas Perfumo, the head of strategy at Kraken, believes that cryptocurrency exchange-traded funds (ETFs) are set to see a big boost. He predicts inflows will double, reaching $50 billion by 2025.

Perfumo mentions that we can expect "final boss allocators" to join the market next year. These include sovereign wealth funds, endowments, and pension funds. He’s confident that nothing will hold back this surge in demand.

Large asset managers are considering putting 1% to 3% of their portfolios into crypto. This shift is supported by major ETF providers like BlackRock and Fidelity. They have helped make crypto more mainstream while managing costs and risks.

The popularity of Bitcoin ETFs has skyrocketed. According to Dune Analytics, the total Bitcoin holdings among 11 providers have surpassed $90 billion. These providers now control over 5% of Bitcoin’s total supply.

Another factor driving Bitcoin demand is the recent U.S. election results. Perfumo explains that the clarity from the election has reassured investors who were worried about the future. He points out that Donald Trump made several promises to the digital assets industry, like creating a strategic reserve of Bitcoin and introducing stablecoin legislation.

On the other hand, Ethereum is taking a bit longer to gain traction as a mainstream financial product. Perfumo notes that Ethereum's complexity makes it harder for investors to grasp compared to Bitcoin's straightforward narrative. However, Ethereum has recently turned a corner. Over $648 million has flowed into the asset in the last five trading sessions, and spot Ethereum ETFs have seen $95 million in net inflows since their launch.

Perfumo anticipates that Bitcoin’s dominance may eventually decrease, leading to more capital flowing into alternative assets like Ethereum. He feels optimistic about the future of the cryptocurrency market.