From Yahoo Finance: 2025-04-22 07:17:00

The rise of digital asset exchange-traded funds (ETFs) is transforming the investment landscape, providing institutional investors with exposure to cryptocurrencies without the complexities of direct ownership. Steve Berryman, chief business officer of Bitwise Onchain Solutions, leads this shift with expertise in financial technology and blockchain infrastructure.

Berryman’s journey into digital assets began after a meeting with Ethereum co-founder Vitalik Buterin in 2015. Transitioning from risk management in traditional finance to developing decentralized finance solutions, Berryman co-founded Attestant in 2019. Attestant’s focus on Ethereum staking services attracted Bitwise, leading to its acquisition in 2024.

Institutional investors face challenges in custody, security, and regulatory compliance when entering the crypto market. Bitwise Onchain Solutions offers a secure infrastructure for staking digital assets, ensuring full control for clients. Berryman emphasizes the importance of aligning digital asset ETFs with traditional investment structures for broader accessibility.

Digital asset ETFs offer diversification benefits for institutional portfolios, potentially enhancing risk-adjusted returns. Berryman highlights the correlations of crypto assets with traditional classes like bonds and equities, emphasizing the importance of adding diversity to optimize portfolio construction.

Tax efficiency is a lesser-known advantage of digital asset ETFs compared to direct ownership, helping investors manage tax liabilities effectively. Despite technical risks, institutional-grade staking providers mitigate concerns, offering professional security safeguards for investors engaging in staking activities.

While digital asset ETFs present concentration risks and regulatory uncertainty, Berryman anticipates further adoption with increased regulatory clarity. He stresses the positive impact of regulations in guiding asset managers towards compliant practices, fostering growth and adoption in the digital asset space.

Looking ahead, Berryman foresees significant growth in institutional engagement with Ethereum staking, driven by its yield potential and risk-reward dynamics. As more institutional capital flows into digital assets, Bitcoin and Ethereum ETFs are expected to dominate, attracting a broader range of investors over the next five years.

For institutions hesitant to enter the digital asset ETF space, Berryman advises a cautious yet proactive approach, suggesting gradual capital allocation over time. With Bitwise Onchain Solutions at the forefront, he remains optimistic about the future role of digital asset ETFs in the financial ecosystem as traditional finance and crypto intersect.

Read more: Institutional investors and the future of digital asset ETFs