Crypto Now a $3 Trillion Asset Class – Crisil
Posted by Colin Lambert. Last updated: January 29, 2025
A new report from Crisil Coalition Greenwich says the crypto industry now represents a $3 trillion asset class, and that optimism continues to grow thanks to the prospect of a more favourable regulatory regime to fuel growth.
The report, Digital Asset Investing 2025: Expanding the Frontier, was authored by David Easthope, head of fintech research in the firm’s market structure and technology practice, and says that, predictably, bitcoin and Ethereum account for around two-thirds of the asset class at $2 trillion.
Price rises in recent months will have largely contributed to the value growth, but the report sees more interest from institutional investors. “In both the US and Europe, asset managers and hedge funds have been dedicating growing resources to digital assets, including technology, data and personnel,” says Easthope. “These personnel now have the wind in their sails due to improving sentiment, valuations and a US regulatory posture seeking to incorporate these assets into traditional regulatory structures.”
The report also predicts that investors will start to take a more sophisticated approach to crypto investing, moving beyond the long-only, or HODL, strategy favoured thus far. It observes that 42% of firms studied have already deployed long/short, multi-strategy and index strategies, amongst others. That sais, Easthope says that some investors could simply allocate to bitcoin or ethereum and stop there. “Moreover, ETFs will continue to be a popular choice for traditional investors, as they offer a way to invest in bitcoin without taking on the technology risks,” he adds.
Crisil Coalition Greenwich says its data also points to a growing focus on the long tail of crypto assets such as alt coins and DeFi tokens going forward as the sector offers more alpha-generating strategies, with derivatives offering a way to gain exposure. “Going forward, in addition to futures, the emergence of options on ETFs will enable investors to speculate and hedge, allowing for a market structure that traders can more fully utilise,” concludes Easthope.