• The Bernstein report states crypto asset managers currently hold about $50 billion and could touch $650 billion in next five years.
  • The research suggested the potential approval of ETFs as the biggest catalyst, calling 2024 a "landmark regulatory year".
  • Crypto adoption in China could fuel this growth; a lower court recognizes Bitcoin as a distinctive digital currency.

Investments in crypto assets have been a dicey move, especially considering the recent market conditions. However, the optimism surrounding their future has been considerably supported by many individuals. Losing this opportunity could also scale your efforts back by over five years.

Crypto asset funds' growth

According to the note from Bernstein Research, the digital asset management industry has seen a jump. This growth could have been amplified going forward, potentially holding somewhere between $500 billion and $650 billion in the coming years.

At present, the crypto asset management sector only holds about $50 billion. This 1,200% increase is possible only after a couple of successful factors. Firstly, the people believe that $650 billion in projects is justified and want more. Secondly, the Bitcoin spot ETF are released by 2024 at the earliest, following approval from the court.

Regardless, the Bernstein Research analyst noted,

"Crypto financial adoption follows hype cycles and we expect a hockey stick adoption, with 2024 as the landmark regulatory year for approval of ETFs.

Beyond demand, regulatory approval of different cryptocurrencies and investment options available to the users play a crucial role in determining the direction of the market.

Demand could grow in unlikely places

Regulatory hurdles are one of the biggest roadblocks to the success of crypto assets. While the United States is criticized for not being the most crypto-friendly country, China stands atop the list after it placed a blanket ban on cryptocurrencies a few years ago.

However, according to the reports, the Shanghai No. 2 Intermediate People's Court has recognized Bitcoin as a unique digital currency. Brought to attention by Tron founder Justin Sun, the tweet read,

"The Shanghai No. 2 Intermediate People's Court believes that with the development of Internet technology, digital currency represented by Bitcoin is unique and non-replicable. It is different from virtual currencies such as Q coins. Its relative scarcity has been widely recognized, and property Attributes are unavoidable no matter in the fields of social life or finance.

This is the second major instance of recognition or at least the acknowledgment of crypto assets in the country. Earlier this year, a state-owned channel, China Central Television (CCTV), broadcasted crypto-related news. 

While neither of the incidents points towards any concrete shift in policy, considering their impact is significantly small in comparison to the rest of the population, it is an optimistic development.

Read more - Can China's recent crypto optimism trigger a bull run in Bitcoin price?


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