A report indicates that by 2025, 83% of institutional investors plan to boost their allocations to cryptocurrencies.
This analysis gathered insights from decision-makers across 352 companies, revealing an increasing belief in the potential for cryptocurrencies to deliver substantial returns.
More than half (59%) of participants intend to allocate at least 5% of their assets under management to digital currencies this year. This trend highlights that cryptocurrencies are transcending their status as niche investments and evolving into essential components of institutional investment portfolios.
An impressive 84% of investors are either currently utilizing or contemplating the use of stablecoins, which have seen significant growth in popularity over the past year. While stablecoins have traditionally been employed to facilitate crypto transactions, they are now being investigated for various applications including yield generation, foreign exchange, cash management, and payments.
Interest in decentralized finance (DeFi) is also on the rise among institutions. Although just 24% of those surveyed currently engage with DeFi, this figure is projected to soar to 75% within two years, as businesses view DeFi as a valuable avenue for accessing lending, derivatives, and staking opportunities.
A significant 73% of respondents indicated they possess assets beyond Bitcoin (BTC) and Ethereum (ETH), showcasing a strong interest in altcoins. Ripple (XRP) and Solana (SOL) are among the most commonly held, with many investors considering single-asset exchange-traded products focused on these altcoins.
Despite the positive outlook, challenges remain. The primary concerns for investors include regulatory ambiguity (52%), market volatility (47%), and secure asset custody (33%). Notably, 68% of those surveyed believe that increased regulatory clarity will play a crucial role in fostering future market growth.
In a related initiative, a blockchain platform aimed at facilitating the institutional adoption of tokenized assets was launched recently. Supported by prominent firms like Aave Labs, Pendle, and Maple Finance, this Ethereum-compatible network intends to bridge DeFi and traditional finance by providing a regulated environment for tokenized assets.