Study: Over 8 in 10 Institutional Investors Eye Expanding Crypto Portfolios

By 2025, 83% of institutional investors intend to boost their investment in cryptocurrencies, as per a study by Coinbase and EY-Parthenon.

The report, which was released on Coinbase's blog on Mar. 18, gathered insights from key decision-makers in 352 firms. It demonstrated that there is an increasing conviction that cryptocurrencies will keep generating substantial returns.

This year, over half (59%) of those surveyed aim to allocate at least 5% of their assets under management to digital assets. This change indicates that cryptocurrencies are progressing beyond their image as a specialized investment and are becoming a fundamental part of institutional portfolios.

84% of investors are either using or contemplating using stablecoins, which have gained immense popularity in the past year. Although stablecoins have traditionally been employed to facilitate cryptocurrency transactions, they are currently being examined for use in generating yield, foreign exchange, cash management, and payments, among other applications.

Institutional interest in decentralized finance (DeFi) is growing as well. While only 24% of surveyed investors currently engage with DeFi, that number is anticipated to reach 75% within two years. Many businesses view DeFi as an opportunity to access the lending, derivatives, and staking markets.

73% of respondents revealed that they own assets other than Bitcoin (BTC) and Ethereum (ETH), indicating that interest in alternative coins remains robust. Ripple (XRP) and Solana (SOL) are the most frequently held, and many investors are considering single-asset exchange-traded products for alternative coins.

Despite the optimism, there are still hurdles to surmount. Investors' primary concerns include regulatory uncertainty (52%), market volatility (47%), and secure custody (33%). 68% of respondents believe that more transparent regulations will contribute to future market growth.

In a related development, on Mar. 17, Securitize and Ethena Labs launched Converge, a blockchain designed to facilitate institutional adoption of tokenized assets. Backed by leading companies like Aave Labs, Pendle, and Maple Finance, the Ethereum-compatible network aims to connect DeFi and traditional finance by offering a regulated environment for tokenized assets.