Survey: Four in Five Institutions Aim to Increase Crypto Holdings
Mitchell Nixon
Institutions Are Doubling Down on Crypto Holdings
A new joint study from Coinbase and EY-Parthenon reveals a remarkably optimistic outlook amongst institutional investors regarding cryptocurrency investments for the coming year.
The comprehensive research, conducted in January and encompassing more than 350 institutional investors, highlights a striking trend: approximately four-fifths of institutions are planning to expand their cryptocurrency portfolios in 2025.
Beyond Bitcoin and Ether
The research unveils that digital asset adoption has already gained significant traction, with roughly 75% of surveyed organisations currently holding various cryptocurrencies beyond the mainstream Bitcoin and Ether. Most respondents indicated their intention to increase their cryptocurrency allocation to constitute at least 5% of their investment portfolios.
The driving force behind this shift appears to be the widespread belief that “cryptocurrencies represent the best opportunity to generate attractive risk-adjusted returns over the next three years,” as stated in the report.
The landscape of alternative cryptocurrencies (altcoins) may see further expansion, contingent upon regulatory approvals for several proposed exchange-traded funds (ETFs) in the United States. Currently, Bloomberg Intelligence suggests that Litecoin, SOL, and XRP are the frontrunners for potential regulatory approval.
In a significant development for institutional cryptocurrency adoption, the Chicago Mercantile Exchange (CME) Group launched SOL futures contracts on 17 March, marking a notable milestone for the alternative cryptocurrency.
The research also revealed substantial institutional interest in stablecoins, with 84% of participants either already holding or actively considering these digital assets. The report elaborates on stablecoin utilisation, noting that “stablecoins for a variety of use cases beyond just facilitating crypto transactions, including generating yield (73%), foreign exchange (69%), internal cash management (68%), and external payments (63%).”
This aligns with Citi’s December forecast, which predicted an acceleration in blockchain activity, particularly in decentralised finance (DeFi), driven by stablecoin adoption.
Whilst current DeFi platform engagement amongst institutional investors stands at 24%, the study projects this figure to triple within two years, approaching 75%. The report notes that “Institutions are attracted to DeFi for myriad reasons, citing derivatives, staking, and lending as the use cases they are most interested in, followed closely by access to altcoins, crossborder settlements, and yield farming.”
This comprehensive analysis suggests a significant shift in institutional approach to cryptocurrency investments, indicating a maturing market with broadening appeal across various digital asset categories.