Institutional Investors Embrace Digital Assets in 2025
Nearly four out of five educational institutions plan to increase their cryptocurrency investments in 2022, according to a report by Coinbase.
A recent survey by Coinbase and strategy firm EY-Parthenon paints a bullish picture for digital asset investments among institutional investors. The polling of 352 decision-makers reveals an increasing appetite for cryptocurrencies.
In the year 2024 alone, 85% of respondents expanded their digital asset allocations, and an astounding 83% are planning to boost their crypto investments in 2025. Kerry-Ann Santos, Coinbase's vice president of marketing, chimed, "An overpowering majority of surveyed investors aim to ramp up their crypto holdings in 2025, buoyed by their belief that cryptocurrencies present the ultimate opportunity to earn lucrative risk-adjusted returns over the next three years."
Diverse Portfolios and Stablecoin Adoption
More than half of the surveyed investors aim to allocate over 5% of their assets under management (AUM) to digital assets in 2025. This proactive move signals a growing recognition of crypto's potential as a legitimate investment avenue.
Interestingly, 73% of investors already maintain a diverse portfolio beyond the traditional Bitcoin (BTC) and Ethereum (ETH). Additionally, 84% either utilize or are exploring stablecoins, underscoring the evolving role of cryptocurrencies in institutional investment strategies.
Institutional investors typically prefer regulated channels for investing in crypto. The survey discovered that 68% are inclined to purchase crypto exchange-traded products (ETPs) offering diversified, multi-token index strategies. This preference indicates heightened confidence in transparent, regulated investment vehicles.
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Coinbase remains optimistic about the future of institutional crypto investment. Santos stated, "We're convinced that the future of crypto looks bright, and we believe institutional investors' optimism will prove justified."
With a wave of significant capital pouring into digital assets, institutional participation in the crypto market is poised for substantial growth, contributing to market maturity.
The Nitty-Gritty
Key findings from the survey include:
- Increased Allocations:
- Nearly 9 out of 10 institutional investors anticipate increasing their digital asset investments by 2025.
- Approximately 59% of surveyed investors plan to allocate an impressive 5% or more of their assets under management (AUM) to digital assets by 2025.
- Returns:
- The primary incentive for investing in digital assets is the potential for higher returns compared to other asset classes.
- Regulation:
- The survey was conducted prior to President Trump's executive order on digital assets, which may further bolster investments.
- Reflecting the Trump Administration's pro-crypto stance, the anticipated regulatory environment is expected to boost institutional interest in digital assets.
- Investment Strategies:
- Investors are contemplating various investment options such as ETPs, investments in digital asset firms, stablecoins, futures, and thematic mutual funds.
In the year 2025, 83% of institutional investors plan to boost their investments in digital assets, such as cryptocurrencies, fueled by the belief that they present lucrative risk-adjusted returns. The survey also reveals that 73% of these investors maintain portfolios diversified beyond Bitcoin and Ethereum, and 84% either utilize or are exploring stablecoins in their investment strategies.
