The interest of asset and wealth managers in cryptocurrencies has surged in 2025, driven by regulatory clarity, institutional infrastructure, and market opportunities.
In the U.S. and globally, these managers are increasingly integrating digital assets into their portfolios, reflecting a shift toward mainstream acceptance.
The Genius Act, a pro-crypto legislative framework passed in 2025, has played a pivotal role by providing regulatory certainty, encouraging institutional participation, and fostering innovation in the crypto space.
Below is an overview of this trend, its drivers, and implications.
U.S. Asset and Wealth Managers
- ETF Adoption: The approval of spot Bitcoin and other crypto ETFs by the U.S. Securities and Exchange Commission (SEC) has been a game-changer. Firms like BlackRock, Fidelity, and Bitwise have seen significant inflows, with BlackRock’s Bitcoin and crypto funds leading with billions in net inflows.BlackRock’s iShares Bitcoin Trust (IBIT) has led with over $72 billion in net assets as of March 31, 2025, and saw $389.3 million in Bitcoin ETF inflows and $154.24 million in Ethereum ETF inflows on July 15, 2025, alone. BlackRock’s crypto ETFs recorded a 370% surge in Q2 2025 inflows, totaling $14 billion, representing 16.5% of total ETF inflows despite a 19% drop in overall net flows
Total spot Bitcoin ETF inflows reached $1.5 trillion since their inception in January 2024, with $1.17 billion in Bitcoin ETFs and $383 million in Ethereum ETFs recorded on July 11, 2025, marking the second-largest inflow day ever.
These ETFs allow wealth managers to offer clients crypto exposure without the complexities of direct ownership. - Regulatory Clarity: The Genius Act, alongside the revocation of SEC’s SAB 121, has enabled U.S. banks like Citi and State Street to offer crypto custody services, reducing barriers for wealth managers. This clarity has boosted confidence, with 47% of traditional hedge funds surveyed in 2024 reporting exposure to digital assets, up from 29% in 2023.
- Strategic Partnerships: Firms like Bitwise have partnered with wealth management firms managing billions in assets, providing strategic advice and integrating crypto into traditional portfolios. For example, Bitwise advises a $50 billion AUM wealth management firm, attending monthly investment committee meetings to guide crypto allocations.
- Conservative Allocations: Even conservative family offices and hedge funds are allocating ~1% of assets under management (AUM) to Bitcoin and other cryptocurrencies, reflecting a cautious but growing acceptance.
Global Asset and Wealth Managers
- Market Expansion: Globally, the crypto asset management market is projected to reach $9.36 billion by 2030, driven by increased adoption and digitalization in finance. Firms like Pantera Capital, a pioneer since 2013, manage diverse portfolios including over 90 blockchain companies and 100 early-stage tokens.
- Regulatory Progress: The European Union’s Markets in Crypto-Assets (MiCA) regulation and similar frameworks globally have provided a clear legal structure, encouraging asset managers to explore digital assets. This has led to 67% of surveyed hedge funds planning to maintain or increase crypto investments in 2024.
- Diverse Strategies: Global managers are shifting toward sophisticated strategies, with 58% of traditional hedge funds using derivatives for crypto exposure in 2024, up from 38% in 2023. Firms like Grayscale offer diversified products, such as Bitcoin Cash Trust and Decentralized Finance Trust, catering to varied investor needs.
- Tokenization and Blockchain: Beyond cryptocurrencies, asset managers are exploring blockchain for tokenization of assets like real estate and intellectual property, with firms like Aivía and ODIN88 offering platforms to manage tokenized portfolios securely.
Drivers of Interest
- Genius Act Impact: The Genius Act has provided a robust regulatory framework in the U.S., addressing definitions of digital assets (e.g., commodities vs. securities) and stablecoin regulations. This clarity has reduced risks for asset managers, enabling confident navigation of global markets.
- Institutional Infrastructure: The rise of custody solutions, trading platforms like EDX Markets (backed by Citadel, Fidelity, and Charles Schwab), and secure storage options like multi-signature wallets have made crypto more accessible for institutional portfolios.
- Market Performance: Bitcoin’s rally to near $100,000 and other cryptocurrencies’ strong 2025 performance have fueled interest, though volatility remains a challenge (four times that of the S&P 500).
Client Demand: Wealth managers face growing client interest in crypto as an alternative asset for alpha generation, with tools like robo-advisors and analytics platforms (e.g., Mudrex, White Swan) simplifying portfolio management.
Challenges and Risks
- Volatility and Valuation: Crypto’s price fluctuations complicate portfolio valuations and fee calculations for asset managers, particularly for funds with high withdrawal rates.
- Regulatory Gaps: While the Genius Act and MiCA provide clarity, global regulatory fragmentation persists, requiring managers to navigate diverse tax and compliance rules.
- Trust and Governance: Fractured trust in crypto markets, coupled with the need for robust custody controls (e.g., Anti-Money Laundering compliance), demands proactive risk management.
- Philosophical Tensions: Some investors, as seen in online discussions, worry that institutional involvement could centralize crypto markets, undermining their decentralized ethos.
South Africa’s Crypto Landscape for Asset and Wealth Managers
South Africa’s crypto market is thriving, with over 10 million South Africans estimated to own crypto and an expected annual growth rate of 8% through 2031.
The Financial Sector Conduct Authority (FSCA) is actively licensing crypto asset service providers, bolstering regulatory oversight and investor confidence.
Local exchanges like Luno, VALR, and Sygnia are driving innovation by offering tokenized products and crypto-linked investment vehicles, enabling asset and wealth managers to meet growing client demand for diversified, global, and stable return opportunities.
These offerings are positioning South Africa as a hub for crypto adoption in Africa, competing with traditional wealthtech platforms like EasyEquities and Satrix.
- Luno’s Tokenized Products: Luno, a leading African crypto exchange, launched tokenized stocks and ETFs in July 2025, available from early August 2025. This pioneering offering in South Africa allows investors to buy fractional shares of over 60 U.S.-listed companies and indices, including Apple, Alphabet, Nvidia, and the S&P 500, using South African rands without foreign exchange fees. Investors can start with as little as R20 ($1.13), making global markets accessible to both retail and institutional investors.
- VALR’s USD Private Credit Token: VALR introduced the Garrington Capital USD Private Credit Token (USDPC) in July 2025, a yield-bearing crypto asset targeting 8-10% annual returns in USD. Initially offered to institutional clients, USDPC is now available to all VALR customers via its over-the-counter desk. The token represents a tokenized interest in a diversified portfolio of senior secured, asset-backed private loans across North America, managed by Garrington Capital and issued by RainFin.
- Sygnia’s Crypto Offerings: Sygnia, a prominent South African asset management firm, has expanded its crypto-related offerings to include exposure to Bitcoin and BlackRock’s iShares Bitcoin Trust (IBIT). In 2025, Sygnia launched a Bitcoin investment option within its multi-asset funds, allowing clients to gain exposure to Bitcoin’s price movements without direct ownership. By offering access to both Bitcoin and BlackRock’s globally recognized ETF, Sygnia caters to institutional and high-net-worth clients looking for secure, regulated crypto exposure.
Outlook
The Genius Act and the global financial sector’s strategic adoption of cryptocurrencies have solidified digital assets as a legitimate asset class in 2025.
Asset and wealth managers worldwide are leveraging ETFs, custody solutions, and blockchain innovations to meet rising client demand and drive portfolio diversification.
Despite challenges such as market volatility and varying regulatory landscapes, the projected $11 billion crypto market revenue by 2030 highlights the sector’s significant growth potential.
This integration, bolstered by regulatory advancements, marks a transformative era for crypto within traditional finance, balancing substantial opportunities with the need for prudent risk management.