CF Benchmarks Foresees Investment Advisers Becoming Top Holders of BTC ETFs, Outpacing Hedge Funds by 2025

Investment advisers are expected to surpass hedge fund managers in owning U.S.-listed spot Bitcoin (BTC) and Ether (ETH) exchange-traded funds (ETFs) by next year, according to CF Benchmarks’ latest insights.

Since 11 spot BTC ETFs launched in the U.S. on January 11, more than $36 billion has been invested, allowing investors to gain exposure to Bitcoin without directly holding or securing the asset. Hedge funds have been the primary investors, controlling 45.3% of the ETFs, while investment advisers, who manage retail and high-net-worth portfolios, currently hold 28%.

However, CF Benchmarks predicts that by 2025, investment advisers will take the lead, owning more than 50% of the BTC and ETH ETF market shares. This shift is attributed to the increasing adoption of these products by the U.S. wealth management industry, valued at $88 trillion, and growing demand from clients seeking exposure to digital assets. As a result, investment advisers are expected to drive net inflows well beyond the record-breaking $40 billion seen in 2024.

In the ether ETF market, investment advisers are already the dominant force and are expected to extend their lead in 2025. Ethereum, the blockchain behind Ether, is expected to benefit from the rise in asset tokenization, while Solana may continue to gain ground if regulatory clarity emerges in the U.S.

CF Benchmarks also notes that asset tokenization, including tokenized real-world assets (RWAs), is set to accelerate, with estimates projecting tokenized RWAs to surpass $30 billion by 2025. The stablecoin market could face disruption as new entrants like Ripple’s RLUSD and Paxos’ USDG challenge Tether’s USDT, whose market share has surged from 50% to 70%.

With blockchain scalability poised for testing and user adoption expected to rise due to anticipated regulatory clarity under a potential Trump administration, on-chain capacity could need to expand to over 1,600 transactions per second (TPS). The report also suggests that the Federal Reserve may adopt more dovish policies—such as yield curve control or expanded asset purchases—which could lead to higher inflation expectations, boosting the appeal of Bitcoin and other hard assets as hedges against monetary debasement.