The global Exchange-Traded Fund (ETF) market could witness some remarkable growth over the next decade.

Assets in the global ETF are projected to reach $35 trillion by 2035, tripling from their current $13 trillion. This prediction comes from Eric Balchunas, Senior ETF Analyst for Binance.

“[ETFs] low-costs, intra-day liq, tax efficiency, flexibility etc. will continue to attract investor cash (and traders’ volume) which will result in more new products, innovative designs and more salespeople,” Balchunas posted on X.

This forecast is based on a conservative 10% compound annual growth rate (CAGR), notably lower than the 17% and 25% rates seen in the past two decades.

While market returns might not match previous highs, the appeal of ETFs remains strong due to the adoption of several spot crypto ETFs that enhance their advantages and diversity in the market.

A spot crypto ETF is a type of ETF that tracks the price of a specific crypto and invests portfolio funds into that crypto. These funds are traded on public exchanges but generally track a particular crypto. Like other similar funds, crypto ETFs are listed on regular stock exchanges, and investors can hold them in their standard brokerage accounts, offering them a convenient way to invest in crypto.

Market expansion

The anticipated benefits are likely to attract significant investor funds and trading activity — both in traditional and crypto ETFs. As the market expands, rising competition in ETFs is expected to fuel the development of creative concepts.

In addition, the market’s growth could include crypto and asset tokenization. Given the growing acceptance of crypto ETFs, more and more crypto — like Solana — could be the next in line for an ETF listing.

Yes.. That said, there's huge hurdles for tokenization, regulatory being one massive one and again. And end users of ETFs already have a frictionless experience (harder to make case to changE). So I obv disagree with your prediction, am on record with it now. We'll see tho!

— Eric Balchunas (@EricBalchunas) June 14, 2024

Asset tokenization is a growing topic, but it is not anticipated to cause major disruption in the ETF market in the near future. Issues like interoperability surrounding tokenization mean that the technology and its impact still have time to gain traction and grow into the norm for financial institutions.

But 2035 is over ten years away, so institutions could eventually complement ETFs, enhancing their functionality and growing global growth to $35 trillion.