83% of institutions to boost crypto allocations in 2025

Institutional investors are increasingly optimistic about cryptocurrencies, with a significant majority planning to increase their allocations in 2025.

According to a survey by Coinbase and EY-Parthenon, 83% of institutional investors intend to expand their cryptocurrency holdings this year, reflecting a growing confidence in digital assets.

The survey, conducted in January, involved over 350 institutional decision-makers and highlighted that 59% of respondents plan to allocate more than 5% of their assets under management to cryptocurrencies.

This trend is driven by the belief that cryptocurrencies offer attractive risk-adjusted returns over the next three years.

Regulatory clarity is seen as a key catalyst for this growth, with institutions eagerly awaiting clearer guidelines to further invest in digital assets.

Currently, nearly three-quarters of surveyed firms hold cryptocurrencies beyond Bitcoin (CRYPTO:BTC) and Ether (CRYPTO:ETH), with XRP (CRYPTO:XRP) and Solana (CRYPTO:SOL) being particularly popular among altcoin holdings.

Stablecoins are also gaining traction, with institutions using them for yield generation, foreign exchange, and transactional convenience.

Meanwhile, the adoption of decentralised finance (DeFi) platforms is expected to triple in the next two years, from 24% to nearly 75% of institutional investors.

As institutions increase their exposure to crypto, there is a growing interest in diversified investment products such as altcoin ETFs, which could further boost altcoin adoption if approved by regulators.

Overall, the survey indicates a broadening use of digital assets across the institutional investment landscape.

In the words of Paul Brody, EY-Parthenon's Global Blockchain Leader, "the level of adoption in the highest high net worth individuals and family offices for some level of crypto, tokenised real-world assets, and DeFi was already quite high, but now the interest is spreading broadly into the institutional investor space".