Institutions Urged to Jump on the Crypto Bandwagon: $30B Opportunity Ahead

• Brokerage firm Bernstein has advised institutions to start allocating to crypto and give up their “zero crypto allocation” strategy.
• Bernstein believes that 2023 will be the best year for institutions to create their crypto strategy and expects the cumulative crypto revenue to increase by sixteen fold in the next 10 years.
• The asset manager also predicts that institutional services’ opportunity will reach a staggering $30 billion by 2033, with crypto-related custody solutions becoming an $8 billion market, market making and prime broking growing to $8 billion and $14 billion, respectively.

Institutions are being urged to invest in crypto, as the asset manager Bernstein advised them to give up their “zero crypto allocation” strategy. Analysts Gautam Chhugani and Manas Agrawal wrote in a research report on Monday that crypto is poised to pivot from a fat infrastructure thesis to a fat application thesis in 2023, laying the foundations for a decade-long “golden age” of innovation for cryptocurrency applications.

The report also stated that 2023 will be the best year for institutions to create their crypto strategy, and that retail traders have been the driving force behind the crypto development to date. According to Bernstein, going forward, growth will be driven by institutional investors with participation in on-shore regulated structures, leading to massive opportunities for the growth of institutional capital in industries such as custody, market making and prime brokerages.

In terms of exact figures, the asset manager predicted that institutional services’ opportunity will reach a staggering $30 billion by 2033, at a compound annual growth rate of 37%. This includes crypto-related custody solutions becoming an $8 billion market, with market making and prime broking also growing to $8 billion and $14 billion, respectively. Furthermore, the asset manager estimates that the cumulative crypto revenue will increase by sixteen fold in the next 10 years, from around $25 billion in 2023 to about $400 billion by 2033.

Overall, these predictions suggest that there is a great potential for institutions to benefit from investing in crypto. Bernstein believes that this will be a decade-long “golden age” of innovation for cryptocurrency applications, and that now is the time for institutions to start allocating their resources to crypto. With such a huge expected growth in the industry, it seems like institutions have no reason not to get on board.