Coinbase: Nearly 60% of investment institutions plan to allocate more than 5% of their assets to Crypto

‍Author: cryptoslate; Compiler: Blockchain Knight

According to a new survey conducted by Coinbase and EY-Parthenon, institutional investors are increasingly bullish on Crypto assets, with 83% of institutional investors planning to increase their Crypto asset allocation this year.

The study, which surveyed 352 institutional decision makers in January, found that investors' confidence in digital assets continues to grow as regulatory clarity improves and a wider range of use cases emerge.

The majority (59%) of respondents plan to allocate more than 5% of their assets under management (AUM) to Crypto assets in 2025, marking the transition of Crypto assets from fringe investments to key components of portfolios.

This trend continues the strong performance of the Crypto asset market in 2024, with the application of stablecoins, DeFi and tokenized assets rising.

Stablecoins and DeFi

Stablecoins continue to be favored by institutions, with 84% of investors surveyed currently using or considering using stablecoins for various purposes beyond trading.

Yield generation (73%), foreign exchange (69%), and internal cash management (68%) are cited as the main drivers for stablecoin use.

Although DeFi is still in its early stages in terms of institutional participation, its growth momentum is significant. Currently, only 24% of investors participate in DeFi, but this proportion is expected to triple to 75% by 2027.

Institutional investors are particularly interested in DeFi derivatives, staking, and lending products, highlighting DeFi's potential to disrupt traditional financial services.

While BTC and Ethereum continue to dominate institutional portfolios, 73% of respondents reported holding at least one other Crypto asset.

XRP and SOL were the most commonly held alternative Crypto assets. In addition, 68% of investors expressed interest in exchange-traded products (ETPs) that provide exposure to a single asset.

Regulatory clarity is a growth catalyst

Despite the optimistic outlook, regulatory uncertainty remains a significant challenge.

More than half (52%) of investors surveyed cited regulation as their top concern, followed by volatility (47%) and custodial security (33%).

However, 68% of respondents believe that greater regulatory clarity will drive the next wave of institutional adoption of Crypto assets.

The report highlights that institutional investors continue to shift into the digital asset space, with increasing allocations, more diverse application scenarios, and expanding participation in related products.

Although regulatory developments and market volatility may pose obstacles, the overall trend suggests that Crypto assets will continue to gain momentum in institutional portfolios.