Institutional investors are showing growing confidence in cryptocurrency markets, with 83% planning to increase their crypto allocations in 2025, according to a joint report released on March 18 by Coinbase and consultancy EY-Parthenon. The report, based on interviews with over 350 institutional investors conducted in January, highlights a clear shift in sentiment toward digital assets, driven by the belief that cryptocurrencies offer the most attractive risk-adjusted returns over the next three years.
Currently, nearly 75% of surveyed firms hold cryptocurrencies beyond Bitcoin (BTC) and Ether (ETH). A “significant majority” also indicated plans to raise their exposure to at least 5% of their portfolios. Notably, altcoins such as XRP and Solana (SOL) emerged as favorites among institutional holders, with interest poised to rise further pending potential U.S. regulatory approvals.
Asset managers are eagerly awaiting the U.S. Securities and Exchange Commission’s decision on more than a dozen proposed exchange-traded funds (ETFs) focused on altcoins. Analysts at Bloomberg Intelligence believe XRP, SOL, and Litecoin (LTC) stand the best chance of near-term approval. Supporting this institutional momentum, the Chicago Mercantile Exchange (CME) launched SOL futures contracts on March 17 — a key step toward legitimizing altcoins in traditional finance.
Stablecoins are also gaining traction, with 84% of institutions either already using or exploring them. Their use cases now extend well beyond crypto transactions. According to the report, institutions are leveraging stablecoins for yield generation (73%), foreign exchange (69%), internal cash management (68%), and external payments (63%).
DeFi platforms, while still underutilized, are expected to experience explosive growth in adoption. Although only 24% of institutions currently engage with DeFi, the report predicts nearly 75% will do so within two years. Key drivers include derivatives, staking, lending, and access to altcoins, along with cross-border settlements and yield farming.
As crypto infrastructure matures and regulatory clarity improves, institutional capital is poised to play a transformative role in the digital asset ecosystem.
