New research from Coinbase and EY-Parthenon shows institutional investors are increasing exposure to crypto, citing strong returns, stablecoin adoption, and DeFi growth
Institutional investors will ramp up their crypto allocations in 2025, with 83% planning to increase their exposure, according to a global survey conducted by Coinbase and EY-Parthenon in January.
The research, which polled 352 institutional decision-makers, highlights growing confidence in crypto’s long-term potential, driven by regulatory clarity, expanding use cases, and strong risk-adjusted returns.
The findings indicate a major shift in portfolio strategies as institutional investors move beyond Bitcoin and Ethereum, exploring altcoins, stablecoins, and decentralized finance (DeFi).
More than 59% of respondents plan to allocate over 5% of their assets under management (AUM) to crypto, reinforcing its role as a core asset class rather than a speculative investment.
Stablecoins and DeFi drive institutional adoption
The study highlights a significant surge in stablecoin and DeFi adoption as institutions seek new ways to generate yield and improve capital efficiency.
84% of institutional investors are either using or considering stablecoins, not just for transactions but also for yield generation (73%), foreign exchange (69%), internal cash management (68%), and external payments (63%).
At the same time, DeFi engagement is set to triple, with only 24% of investors currently involved but 75% expecting to use DeFi within two years.
Institutional players see staking, derivatives, and lending as the most attractive opportunities, followed closely by cross-border settlements and access to alternative assets.
Altcoins are gaining ground as investment strategies evolve
The survey also found that 73% of institutional investors hold cryptocurrencies beyond Bitcoin and Ethereum, signaling a broader shift in investment strategy.
XRP and Solana (SOL) emerged as the most commonly held altcoins, reflecting the increasing interest in blockchain ecosystems beyond the top two digital assets.
Moreover, 68% of surveyed investors expressed interest in exchange-traded products (ETPs) for altcoins, with single-asset investment vehicles becoming a preferred way to gain exposure to digital assets.
With potential regulatory approval for altcoin ETFs on the horizon, institutional demand for alternative crypto assets is expected to rise further.
However, regulatory uncertainty remains a hurdle, shaping how quickly institutions can scale their exposure.
Despite optimism, 52% of investors cited regulation as their top concern, followed by volatility (47%) and secure custody (33%).
Still, 68% believe greater regulatory clarity will drive the next wave of adoption, paving the way for increased institutional participation.
With allocations rising, stablecoin adoption expanding, and DeFi engagement set to accelerate, the survey suggests that 2025 could be a defining year for institutional crypto investment.
