Wall Street Plans to Load Up Crypto Bags
Institutions make their mark in the Web3 revolution with DeFi and ETFs.
More than 80% of the surveyed institutional investors are likely to boost their cryptocurrency holdings in 2025, with most planning to commit over 5% of their portfolios to digital assets, showed a Coinbase/EY-Parthenon study of 352 global investment firms.
The survey, conducted in January as Bitcoin surged past $108,000, captures a financial sector increasingly comfortable with cryptocurrency as an asset class.
Lower interest rates are among the factors pushing portfolio managers toward digital assets and DeFi for enhanced returns, the survey revealed.
Besides lower rates, the respondents noted a couple more motivators that pushed them to consider digital asset allocation.
Regulatory clarity (52% cited it as their top concern)
Custody framework certainty (50%)
Higher return potential in a post-rate-cut environment
Beyond Bitcoin: Altcoins Gain Traction
The survey found XRP slightly outpaced Solana in institutional ownership at 34% versus 30%.
XRP's regulatory clarity following Ripple's partial legal victory likely enhanced its appeal, while Solana's technical capabilities and growing DeFi ecosystem continue attracting institutional interest.
Even Dogecoin, once dismissed as a joke, now finds itself in 25% of institutional portfolios.
ETF Factor
The investment vehicles matter as much as the assets themselves.
Sixty percent of respondents prefer registered products like ETFs for their crypto exposure, though 29% maintain direct holdings through digital wallets.
This hybrid approach combines the regulatory comfort and ease of access that ETFs provide with the additional yield opportunities available through direct ownership, such as staking and lending.
With applications pending for XRP, Solana, and other altcoin ETFs, the accessibility landscape could expand dramatically in 2025.
DeFi
Most striking is the projected adoption of decentralised finance platforms, with 75% of institutions expecting to utilise DeFi within two years.
This rapid integration suggests traditional finance is being reimagined, with major institutions poised to leverage DeFi for yield generation and settlements — potentially signalling a paradigm shift in financial infrastructure.
Regulatory questions also linger despite the administration's crypto-friendly stance. The SEC's new Crypto Task Force and proposed legislation to shift oversight to the CFTC remain works in progress.
Nevertheless, the trajectory appears clear: cryptocurrency is shedding its outsider status and becoming integral to institutional strategy.