The digital asset market is entering a new phase, and if recent institutional sentiment is any indication, the next chapter of crypto could be one of explosive growth. A landmark 2025 survey conducted by Coinbase and EY Parthenon sheds light on institutional crypto investments — from what assets they’re holding to how they plan to allocate funds in the coming years. If you’re a crypto investor, this is not the report to overlook.
In this detailed analysis, we unpack the findings from the report, titled “Increasing Allocations in a Maturing Market: 2025 Institutional Investor Digital Assets Survey”, and reveal the major cryptocurrencies and trends Wall Street is betting on. Read on to discover which coins institutions favor, how much they plan to invest, what barriers they still face, and the powerful catalysts set to ignite the next crypto bull run.
Institutional Investment in Crypto Is Booming
According to the survey, 85% of institutional investors increased their crypto holdings in 2024, and an equally impressive 83% plan to increase their allocations in 2025. These aren’t just small-time moves — respondents in the survey include major players such as asset managers, hedge funds, private banks, venture capital funds, pension funds, and family offices. Most of these institutions manage between $1 billion and $50 billion in assets under management (AUM), and some even manage more than $1 trillion.
This represents a massive influx of capital. As institutional investors continue to increase their exposure to digital assets, the resulting demand is likely to have profound effects on liquidity, valuations, and the overall adoption of crypto assets.
Hedge funds and family offices are leading the bullish charge — 25% of them plan to significantly increase their crypto holdings in 2025. This points to a broader institutional belief that digital assets offer higher returns compared to traditional investment classes and represent a hedge against inflation and geopolitical instability.
Which Cryptocurrencies Are Institutions Holding?
The report reveals overwhelming support for Bitcoin (BTC) and Ethereum (ETH), with 97% of respondents currently holding BTC and 86% holding ETH. These two remain the dominant institutional choices. However, 73% of institutional investors also said they hold additional altcoins — albeit typically just one or two — indicating rising interest in the broader altcoin market.
Interestingly, hedge funds are the most likely to diversify beyond BTC and ETH, with 81% of them holding other cryptocurrencies. This willingness to explore new assets could drive early-stage investments in next-gen blockchains, layer 2 solutions, and DeFi-native tokens as institutions begin to broaden their exposure.
The Rise of Crypto ETFs and ETPs
Institutional investors overwhelmingly prefer regulated investment vehicles for gaining crypto exposure. In 2024, 76% held crypto either directly or through exchange-traded products (ETPs). In 2025, this number is expected to rise to 87%. Among these, 69% plan to use ETPs for crypto exposure, further validating the importance of spot Bitcoin and Ethereum ETFs.
While the interest in BTC and ETH ETPs is strong, only 21% of investors expressed interest in altcoin-based ETPs. Even fewer — just 17% — are interested in staking-enabled or multi-crypto ETP products. This indicates that while institutional demand is growing, it still heavily favors tried-and-true assets over speculative tokens.
As regulatory frameworks evolve and more staking products become SEC-compliant, this cautious stance toward altcoin ETPs may shift. But for now, institutions are clearly focused on large-cap digital assets.
Tokenized Real-World Assets: The Next Frontier
Tokenized real-world assets (RWAs) are emerging as a major institutional focus. The report finds that 57% of institutional investors are very interested in RWAs, while another 35% want to learn more. This category includes tokenized bonds, equities, real estate, commodities, and private equity products.
Why the interest? Tokenized RWAs offer fractional ownership, faster settlement times, enhanced liquidity, and the ability to optimize portfolio construction. According to the report, 72% of respondents plan to invest in tokenized assets by 2026 — 28% intend to invest in 2025, and 33% will invest in 2026 or later.
As blockchain infrastructure matures, tokenized RWAs could become the backbone of modern investment portfolios. This transition represents a significant opportunity for protocols specializing in asset tokenization and for the blockchains hosting these assets.
Institutions Are Warming Up to DeFi
One of the most striking data points from the report is the projected growth of institutional involvement in decentralized finance (DeFi). Currently, just 24% of institutional investors engage with DeFi. But within the next two years, that figure is expected to triple to 75%.
The most attractive DeFi services for institutions include:
- Derivatives
- Staking
- Lending and borrowing
- Altcoin access
- Cross-border settlement solutions
The biggest obstacles for those who aren’t yet involved include regulatory uncertainty, compliance risks, and a general lack of education. But that’s changing. As high-quality educational resources improve and DeFi becomes more compliant, expect institutions to flood into the space. DeFi protocols that prioritize institutional-grade infrastructure will be major beneficiaries.
Stablecoins: Growing Institutional Use and Interest
Stablecoins are increasingly popular among institutional investors. In 2024, 45% of respondents held stablecoins. In 2025, an additional 38% of institutions that previously held none said they’re interested in acquiring them.
The top use cases for stablecoins among institutions are:
- Earning annualized yield
- Transactional convenience
- Cross-border transfers and FX benefits
- Internal cash management
- Store of value
Hedge funds are the most bullish, with 70% already holding stablecoins and 22% expressing interest. Asset owners are also warming up to the idea — only 29% currently hold stablecoins, but 55% plan to start.
Asset managers, however, remain cautious: 22% expressed no interest at all in stablecoins, suggesting some risk aversion or regulatory concerns in that subset.
Risk Appetite Is Increasing — Despite Market Volatility
When asked to rank the top-performing asset classes for the next three years, institutions overwhelmingly put crypto at the top (68%), followed by U.S. equities (40%) and private equity (38%). By contrast, traditional safe havens like gold (15%), corporate bonds (7%), and government debt (4%) ranked far lower.
This reveals a noticeable shift in institutional risk appetite. Historically conservative investors are now pursuing higher-risk, higher-reward strategies, and crypto is leading the way.
What’s Holding Institutions Back?
Despite the bullish tone, institutional investors are still concerned about several key risks. The top three barriers to broader crypto adoption are:
- Regulatory uncertainty (52%)
- Volatility (47%)
- Security of custody (33%)
Other noted concerns include market manipulation (31%) and lack of valuation metrics (31%). Illicit activity ranked relatively low, with only 25% viewing it as a primary concern. This suggests that institutional perception of crypto is maturing, and FUD-driven narratives are losing their hold.
Interestingly, institutions that currently have no plans to invest in crypto still list illicit activity, regulatory uncertainty, and valuation concerns as top reasons for staying away. Bridging this gap through education, improved analytics, and better regulations will be key to onboarding this hesitant segment.
Regulation Will Be the Catalyst for Mass Adoption
When asked what would serve as the greatest catalyst for crypto adoption, 57% of institutional respondents said regulatory clarity. Closely behind was institutional adoption itself (56%), followed by increased use of crypto for payments, lending, and financial services (43%). Only 20% saw DeFi as a key growth catalyst — a surprising figure, given DeFi’s transformative potential.
Institutions also listed the Trump administration’s potential role in advancing crypto. While the survey was conducted before any executive orders were signed, there’s optimism around pro-crypto policies, increased investor sentiment, and greater involvement from traditional finance firms under a more favorable administration.
Asset Allocation Trends: How Much Crypto Are They Buying?
The survey also explored how much of each institution’s portfolio is allocated to crypto. In 2024, 55% of firms allocated more than 5% of their AUM to crypto, and 59% plan to do so in 2025. The most common allocation size remains between 1–5% of portfolio assets.
Institutions prefer indirect exposure: 60% said they favor ETPs and funds, while only 29% prefer direct crypto holdings on exchanges or wallets. Just 11% had no preference. This conservative preference highlights the need for secure, compliant, and regulated investment vehicles.
Are Institutions Launching Their Own Crypto Funds?
The report also reveals that nearly half of all surveyed institutions are considering launching their own crypto funds within the next two years. Of those, 60% are looking to launch Bitcoin ETPs, 56% Ethereum ETPs, and just 21% are eyeing altcoin ETPs. Interest in staking-enabled funds remains low, at 17%.
This reserved attitude toward altcoin and staking funds could change if market dynamics shift and altcoins outperform — or if staking becomes easier to implement within regulatory boundaries.
Institutions Want to Tokenize Their Own Assets
In a particularly bullish signal for blockchain adoption, 40% of institutions said they are actively exploring how to tokenize their own assets. Another 44% said they want to learn more before making a decision.
What drives this enthusiasm? The main benefits cited were instant settlement times, increased liquidity, and fractional ownership — all of which streamline operations and offer better capital efficiency.
As more firms realize the cost and efficiency benefits of tokenization, expect an explosion of tokenized private equity, debt, real estate, and more — all of which will be hosted on blockchain infrastructure.
The Big Picture: What Does This Mean for Crypto in 2025?
This report paints a clear picture: institutional interest in crypto is real, growing, and diversifying. Institutions aren’t just investing in Bitcoin anymore — they’re exploring Ethereum, altcoins, tokenized assets, stablecoins, and even DeFi.
The next major catalyst is regulation. Once regulatory clarity is in place, it could:
- Accelerate institutional entry
- Boost market liquidity
- Unlock new DeFi integrations
- Increase stablecoin adoption
- Spark tokenization across sectors
As institutions go risk-on in search of higher returns, crypto is becoming a prime destination. Regulatory approval will likely lead to more direct crypto ownership, reducing reliance on ETFs and custodians. It will also drive greater interest in staking, real-world assets, and blockchain infrastructure.
The Institutions Are Coming
Wall Street is making its move – are you positioned to benefit?
This report confirms what many crypto veterans have been sensing for years: Institutions are not just testing the waters anymore. They’re diving in, building infrastructure, launching funds, and shaping the future of the industry. While retail investors may still be skeptical or distracted by short-term volatility, institutions are playing the long game.
Crypto is no longer a speculative niche; it’s becoming a foundational layer of modern finance. And as the survey shows, the smart money is getting in position before the next wave of adoption hits.
