Bitwise Major Report: 10 New Trends in Institutional Crypto Investment

Unlike most assets, crypto assets were initially driven by retail investors. Even today, it is estimated that retail investors still control more than two-thirds of the crypto market.¹ This means that institutional investors will still play an important role in the development of this asset class. Therefore, the extent to which institutional investors embrace crypto assets will have a significant impact on the prospects of this asset class.

However, institutions are often reluctant to publicly discuss their views on crypto assets. Whether due to competitive considerations or concerns about reputational damage, most institutions have historically avoided publicly disclosing their holdings.

This report aims to break that silence.

Earlier this year, we conducted in-depth discussions with senior investment professionals from 15 large institutions worldwide to understand their views on crypto assets. We asked some direct questions: What crypto assets are you buying? How much are you allocating? Why hold crypto assets?

Their candid responses surprised us. One of the findings of the research is that despite the price of crypto assets retracting more than 50% between October 2025 and April 2026, none of the institutions we interviewed planned to reduce their allocation to this asset class. Institutions are making long-term allocations.

Whether you are looking to understand how other institutions in the field view this area or hoping to gauge market sentiment as a retail investor, this report will open a window for you, helping you understand how some of the world's most influential investors view the crypto market today.

Institutional Funds Are Entering the Crypto Space

Institutional investors are beginning to view crypto assets as an important component of their portfolios. The institutionalization of crypto assets is happening faster and more sustainably than the public generally believes. Despite many uncertainties in the market, we expect that within the next five years, most institutional investors will hold crypto assets.

After interviewing 15 senior asset allocation decision-makers from endowments, foundations, pensions, multi-family offices, sovereign wealth funds, and publicly traded companies, we identified three consistent trends.

Bitcoin is a widely recognized high-confidence asset among institutions, while Ethereum and Solana are not. All the institutions we interviewed that hold crypto assets have Bitcoin. Most institutions view Bitcoin as a store of value and often explicitly compare it to gold. Ethereum, Solana, and other crypto assets are seen by some institutions as early-stage technology investments, with clear performance thresholds set and shorter holding periods adopted. The allocation of crypto assets among the interviewed institutions ranges from 0.5% to 13% of investable assets, with most between 1% and 2%.

Institutional allocations to crypto assets show strong persistence. From October 2025 to April 2026, the crypto market fell by about 50%, but none of the institutions we interviewed reduced their allocations during the market downturn; in fact, several increased their holdings. When asked what circumstances would prompt them to exit, no one mentioned price. The reasons they consider for exiting relate to investment logic: Ethereum and Solana failing to demonstrate real utility, regulatory reversals, or a crisis of credibility in the entire industry. This contradicts a common assumption: institutions are not the ones most likely to sell off during a downturn in the crypto market; the selling pressure comes from elsewhere.

The remaining obstacles to growth are governance and reputation, not investment value. Most of the institutions we spoke with recognize the value of incorporating crypto assets into a diversified portfolio. What currently slows down the allocation process is how to categorize crypto assets within existing investment policies, how to gain approval from boards and committees, and how to manage the reputational risks that come with external scrutiny. As more spot crypto ETFs emerge, the regulatory environment improves, and peers disclose their holdings, these obstacles are diminishing but remain significant.

We believe that institutional demand is gradually accumulating outside the public eye. Some investors we interviewed who have not yet allocated to crypto assets are already in the late stages of due diligence. However, we expect this process to unfold gradually. For assets that remain controversial, reaching a consensus among institutions may take years; even when allocations are made, institutions often prefer to keep a low profile. But various signs indicate that institutional funds are entering the crypto space.

01 / Bitcoin is a Widely Recognized High-Confidence Asset Among Institutions

All the institutions we interviewed that hold crypto assets have Bitcoin. For almost all institutions, Bitcoin is the first crypto asset they bought, the one they hold the most of, and the one they have held the longest. It is the only crypto asset that allows institutional investors to form a consensus.

The reasons for institutions investing in Bitcoin vary. Most institutions view Bitcoin as a store of value with significant potential for appreciation, often placing it alongside gold as a hedge against the decline of fiat currency purchasing power. One endowment described its Bitcoin position as an investment in a "value storage tool transitioning from emerging to mature," while also being a bet similar to venture capital: the Bitcoin market will grow to $20 trillion in the next 5 to 15 years.

Several institutions allocate a basket of mainstream crypto assets based on market capitalization, so Bitcoin accounts for about 80% of their crypto holdings. However, most institutions hold Bitcoin as an independent position.

Even institutions that cannot hold Bitcoin directly recognize its role in diversifying risk within their portfolios. A large endowment's policy prohibits it from holding any spot commodities, including Bitcoin, but it still views Bitcoin as the digital counterpart to gold and the core asset of the entire crypto asset class.

02 / Ethereum and Solana Are Bets Dependent on Investment Logic

Bitcoin has become a consensus among institutional investors, but Ethereum, Solana, and other smaller market cap crypto assets have not. Institutions that hold these assets have smaller allocations, shorter investment horizons, and set clear exit conditions.

Some institutions do not hold Ethereum or Solana at all, for various reasons. One institution that extensively used DeFi applications involving lending, trading, stablecoins, and staking did not see how the underlying tokens gained value. In their view, users do not care about the differences between blockchains, nor do they care whether applications run on Ethereum or Solana. Another institution found it difficult to incorporate Ethereum or Solana into its existing investment framework: are they stores of value, equity-like assets, or commodities? If there is no clear logic for value accumulation or if they cannot match existing investment frameworks, the default choice is not to invest.

Institutions that hold both Ethereum and Solana view them as early-stage technology investments. Several institutions explicitly stated that they would sell if there is no substantial adoption growth in the coming years.

Institutions holding both assets are beginning to show preferences. One endowment favors Solana's architecture, believing it has high throughput and low latency without relying on Rollup. Another holds Ethereum instead of Solana, focusing on Ethereum's actual adoption and its dominant market share in the real-world applications of crypto assets, including DeFi, prediction markets, tokenization, and stablecoins.

Notably, in almost all cases, institutions view these assets as driven by real utility; their value comes from actual applications in the real world. Some in the crypto industry have attempted to position Ethereum, especially Ethereum, as a competitor to Bitcoin in terms of monetary use, but the institutional group does not share this view. In their opinion, only as trading activity and transaction fees increase can value be clearly accumulated to the underlying tokens of Ethereum and Solana, making these assets investment-worthy.

03 / Allocation Sizes Are Small, but the Overall Direction Is Increasing

The allocation of crypto assets ranges from 0.5% to 13% of investable assets, with most between 1% and 2%, typically distributed across channels such as ETFs, direct holdings, venture capital, and hedge funds. The common practice is to allocate enough to have an impact on the portfolio when the crypto investment logic pays off, but not so much that it drags down the entire portfolio.

During the market fluctuations from late 2025 to early 2026, institutions maintained their existing allocations or continued to push toward established goals. Many institutions are shifting funds from less liquid private investment tools to direct holdings or gaining exposure through ETFs. Several institutions have also adopted market-neutral strategies to reduce the volatility brought by crypto assets and make allocations easier to approve. One asset allocation decision-maker believes this is a way to encourage institutions to stop waiting: "A more easily marketable approach is to start with market-neutral strategies. You are not really betting on cryptocurrencies; you are just betting on arbitrage."

The focus of internal discussions within these institutions is no longer whether to allocate to crypto assets, but how much to allocate, through what tools, and which assets to allocate.

04 / Spot ETFs Have Changed the Way Institutions Enter the Crypto Market

Spot crypto ETFs have changed the way institutions enter this asset class. Almost all the institutions we interviewed are already using or planning to use such ETFs.

Institutions transitioning from direct custody to ETFs mentioned lower overall costs, lighter operational burdens, and a simple fact: from a back-office operational perspective, ETFs make crypto assets look like any other ordinary holdings. For early allocators, they had spent years dealing with the custody, trade execution, and holding reporting of crypto assets, so this aspect brought by ETFs is more significant than many realize.

Institutions that have not yet transitioned to ETFs are mostly constrained by private investment tools and cannot freely choose their exit timing. These institutions are actively evaluating ETFs, considering not only the same operational advantages but also the rebalancing flexibility and liquidity that closed-end products cannot provide.

However, a few institutions intentionally choose not to use ETFs. One sovereign wealth fund is building local custody infrastructure to meet government requirements for direct control over the underlying crypto assets. A large public endowment's policy prohibits it from holding any spot commodities, including through ETFs. Another institution mentioned that ETF holdings might need to be disclosed through 13F filings, which would bring about public exposure they wish to avoid.

This will also affect the estimation of institutional holding sizes. Since some institutions intend to invest in tools that can avoid 13F disclosures, estimates of institutional crypto asset holdings based on 13F filings should be viewed as a minimum estimate rather than an upper limit.

05 / The Combination of Gold and Bitcoin Has Become an Important Allocation Framework for Institutions

For most of the institutions we interviewed, Bitcoin and gold are now often considered together. Especially for institutions concerned about the decline of fiat currency purchasing power, Bitcoin is an important part of the portfolio. One large endowment stated, "People are starting to put Bitcoin and gold together as an investment to hedge against fiat currency depreciation."

Several endowments intend to synchronize the establishment of Bitcoin and gold positions as an option for portfolio construction. In a noteworthy case, a sovereign wealth fund funded part of its crypto asset allocation by selling foreign exchange and gold reserves.

For some institutions, Bitcoin and gold are increasingly seen as two expressions of the same investment perspective, rather than just complementary assets. One institution placed Bitcoin in the "gold category" and candidly stated its long-term view: "When we talk about this in ten years, we might tell you that we have given up gold and switched entirely to Bitcoin."

However, not all institutions share this view. One foundation completely rejected the notion of "digital gold," categorizing all crypto assets as disruptive technology rather than value storage tools.

06 / Configuration Barriers Come from Operations and Reputation, Not Investment Analysis

Among the institutions we interviewed, determining whether crypto assets have investment appeal is usually the easiest hurdle to overcome. The past performance and development trajectory of crypto assets are quite clear, and the view of crypto assets as a disruptive technology is widely accepted. It is believed that it will change multiple fields, from capital markets and global payments to value storage markets.

What truly slows down the allocation process are operational, reputational, and classification issues: how to custody assets, how to publicly explain investment logic, and how to incorporate crypto assets into portfolios based on stocks, bonds, and alternative assets. However, over time, these barriers are gradually weakening, just like the process experienced by all emerging asset classes.

The most practical advice we heard came from a multi-family office: "Just establish a set of processes." In other words, apply the same evaluation framework to crypto assets as to other assets. Even if they believe these assets are "incredibly volatile," do not set a higher investment threshold specifically for crypto assets.

The decision-making frameworks of different institutions vary widely. On one end are institutions without formal approval processes, where the investment team decides on allocation and executes directly. On the other end, a sovereign wealth fund's crypto project is subject to direct scrutiny from senior officials at the central bank, including background checks on the chief investment officer, security reviews, public opinion risks, and peer recognition. These factors receive more attention than the fundamental basis for the investment itself.

Another challenge is how to classify crypto assets. Several institutions struggled to categorize Ethereum and Solana, with some deciding not to invest solely due to this ambiguity. Two endowment funds addressed this issue in different ways: one added a "liquidity risk investment" category to its venture capital portfolio; the other sidestepped the debate by categorizing all crypto assets as venture capital.

07 / Career Risk is an Important Factor Influencing Institutional Behavior

Career risk, which refers to the professional costs that a failed allocation may impose on investment professionals, affects every public-facing institution we interviewed. It is often one of the most important factors in deciding whether to allocate and how to allocate. Foundations, public pensions, and sovereign wealth funds all list it as a consideration. Smaller, less exposed, or founder-led institutions feel less pressure, but this pressure still exists.

Notably, we found that institutional allocations often occur in clusters. Once a certain number of peers have completed and disclosed their allocations, the risk shifts from "I allocated, and it went wrong" to "Everyone allocated, and I missed out." Our interviews indicate that the endowment fund sector may be approaching this tipping point. Several large university endowment funds have publicly disclosed their crypto asset holdings, and several endowment funds told us they are now more directly asking peers about their crypto asset allocations. One even stated that comparing with peers is one of the main driving factors for its allocation to crypto assets.

However, this also brings a risk: if the market remains sluggish for an extended period, the tide may turn again, at which point the reputational risks of allocating to crypto assets may outweigh the risks of not allocating.

08 / Crypto Fund Management Firms for Institutions are Highly Concentrated

There are not many crypto fund management firms that meet institutional investment requirements. One sovereign wealth fund stated: "It's hard to find management firms that meet our minimum requirements for scale, mature performance records, and operational infrastructure. We found about ten names." When it exchanges information with other institutions, the list hardly changes: "Different institutions have different due diligence progress, but everyone is looking at the same group of management firms." Other institutions we interviewed confirmed this.

This convergence is somewhat reassuring, indicating that institutional investors, after rigorous scrutiny, have reached similar conclusions about which management firms can meet the standards. However, it also creates concentrated risks. As more institutions complete due diligence and begin investing, a significant portion of funds will flow to a few companies. If any of these firms experience compliance failures or operational issues, the entire group of institutions may be affected. Some investors are concerned about the consequences of this. One endowment fund stated: "Raising too much capital and being forced to invest, while there aren't enough good opportunities in the market, is a risk."

This concentration can also have reverse effects. Management firms eager to secure funding from sovereign wealth funds and endowment funds thus have significant bargaining power. Some institutions are seeking ways to collaborate beyond ordinary fund investments. One sovereign wealth fund is considering directly holding equity in management companies to "gain full transparency, understand their investment strategies, and better understand the market."

09 / Exit Conditions Depend on Investment Logic, Not Price

From October 2025 to April 2026, the crypto market fell by about 50%. None of the institutions we interviewed reduced their crypto asset allocations during this period, and several even increased their holdings. When asked what circumstances would prompt them to exit, no one mentioned a price drop.

Instead, the exit conditions they proposed were all related to investment logic. Several institutions stated that if they find that the growth of real-world adoption in the coming years does not lead to an increase in asset prices, they would exit Ethereum and Solana. One institution that has held crypto assets for ten years candidly said: "There has to be something that really works. If at some point these things still don't work, we will exit." Institutions that only hold Bitcoin stated that if a clear application emerges on Ethereum or Solana that significantly changes the flow of value, they would reconsider their allocations. Sovereign wealth funds listed a reversal in regulatory direction or a major credibility crisis in the industry as reasons for considering an exit.

Some of these institutions have held positions and experienced multiple market pullbacks exceeding 50%, including the drop in 2022. They are not surprised by volatility and do not back down because of it.

An investment advisor stated: "If the investment logic is correct, considering that adoption is growing in an S-curve, selling now would mean selling too early."

This means that when the crypto market declines, the main sellers are not institutional investors, but retail investors, forced sellers, or traders executing short-term strategies, such as closing basis trades or liquidating margin positions. Institutional investors are often on the other side of these trades.

10 / Sovereign Wealth Funds' Crypto Allocations are Gradually Taking Shape

Several sovereign wealth funds we interviewed are actively assessing substantial allocations to crypto assets. Some have completed allocations, while others are still in the early research phase. Regardless of the stage of progress, we found their overall attitude towards crypto assets to be positive. However, compared to smaller crypto investors, sovereign wealth funds are moving more slowly in advancing allocations.

One sovereign wealth fund explained that even with presidential support and political consensus on the legal and regulatory infrastructure needed to direct sovereign capital into crypto assets, it still takes over a year to build. Other sovereign wealth funds have also publicly mentioned that related plans will be advanced over several years.

It is also noteworthy that the reasons for sovereign wealth funds to allocate to crypto assets sometimes extend beyond the impact on their portfolios. Several sovereign investors view crypto investments as a means to attract foreign capital, support national crypto industry initiatives, or promote their country as a hub in this rapidly growing industry. This line of thinking has a practical impact: even if investment returns are poor, as long as advancing these ancillary goals remains valuable, institutions may continue to hold related positions. Therefore, the crypto allocations of sovereign wealth funds may be more sustainable than the market expects.

Looking Ahead

A fundamental question underlies all our interviews: Will the pace of institutional adoption of crypto assets accelerate or slow down? Overall, the interview results present a positive picture. However, we gradually discovered that whether institutional adoption grows or stagnates will depend on four key factors, two of which may provide momentum, while two may pose obstacles.

The first major positive factor is regulatory clarity. Several interviewees stated that the approval of spot crypto ETFs and the current U.S. government's supportive regulatory stance towards the crypto industry are driving factors for their recent expansion of allocations. If regulatory progress continues, including the approval of more products, the introduction of legislation supporting the crypto industry, and other countries adopting crypto assets at the sovereign level, it will lower the operational, reputational, and regulatory barriers, driving more investment.

The second positive factor is the increasing participation of peers, which often brings a flywheel effect: the more credible institutions publicly allocate, the lower the reputational cost of investing in crypto assets, and the higher the likelihood that other institutions will publicly allocate as well. Our research shows that this dynamic has already begun to take effect; each new allocating institution may lower the entry barriers for multiple institutions into the market. The same forces may also operate in reverse. Therefore, we believe that the trend of institutional adoption, whether positive or negative, is more likely to exhibit exponential changes rather than linear changes.

As for the adverse factors, the most significant downside risk is a major crisis in the crypto industry, including technical failures or the collapse of important industry institutions. In the past, severe crises have caused institutional adoption to stagnate for years. Similar events are likely to reshape institutions' considerations of career risk and prevent new allocations for an extended period. Strengthened regulation, along with substantial advancements in custody, security, and infrastructure, has significantly reduced this "blow-up" risk, but it has not eliminated it entirely.

The second layer of risk is that Ethereum, Solana, and crypto applications fail to prove their significant utility under large-scale adoption. For institutions holding these assets, merely having users of stablecoins, DeFi, tokenization, and prediction markets is not enough; if these activities do not bring value to the underlying tokens, the investment logic cannot be proven valid. In other words, growth in adoption is not enough; prices must also keep up. Several institutions have set clear deadlines for this, usually within the next few years, and will monitor stablecoin trading volumes, DeFi and tokenization activities, and whether fees genuinely accumulate to the underlying tokens of Ethereum and Solana, rather than flowing to competitors or other layers in the tech stack. If substantial adoption does not occur, or if growth in adoption fails to drive token value, institutional portfolios may ultimately retain only Bitcoin.

How Different Types of Institutional Investors View Crypto Assets Today

Throughout the interviews, an interesting phenomenon impressed us: various types of institutional investors generally believe that including crypto assets in their portfolios may be reasonable, but they differ in specific allocation arrangements, including who approves, who supervises, and where crypto assets should be placed in the portfolio.

01 / Endowment Funds and Foundations

Assets Under Management: $500 million to $75 billion Crypto Asset Allocation: 0.5% to 10% (most are 0.5% to 2%; one reached 10% at one point) Investment Tools Used: Venture capital, spot ETFs, direct custody, hedge funds

Endowment funds and foundations are pioneers in institutional adoption of crypto assets, with many institutions stating they have made substantial investments. This is because, compared to other institutions, they typically face lighter governance requirements. According to our interviews, in most cases, the decision to allocate primarily depends on the judgment of the chief investment officer and a small team, without the lengthy approval processes of large committees.

This group's prominent characteristic is the intense competition among institutions. Due to the comparative performance of donation foundations, their allocation of crypto assets may carry elements of strategic play: How much crypto assets do competitors hold? What impact will it have on relative performance if one's allocation ratio is lower or higher than peers? A senior investment professional from a large American donation fund candidly stated, "If your peers hold crypto assets and you do not, then relative to the benchmark you are being assessed against, you are effectively in a structurally short position."

Therefore, the allocation behavior of this group may drive each other: every disclosure of allocation may trigger a chain reaction, prompting peers to follow or benchmark against competitors' practices.

Among them, one foundation differs from others, with its crypto asset holdings sometimes exceeding 10% of its portfolio. It is less concerned about how peers operate and views crypto assets as a bet on growth and disruptive technology. This approach supports larger-scale allocations and aligns with its mission-driven investment strategy, which is to "actively embrace disruptive technologies that we believe can change donation funds and ultimately benefit beneficiaries in the long term."

02 / Sovereign Wealth Funds

Assets Under Management: $1 billion to $100 billion Crypto Asset Allocation: 1.0% to 1.5% Investment Tools Used: Hedge funds (directional and market-neutral), venture capital, direct custody, spot ETFs, and index funds

Sovereign wealth funds are at the other end of the governance spectrum. One sovereign wealth fund we spoke with has its crypto asset allocation subject to scrutiny from the country's central bank leadership. The main concerns focus on external perceptions, such as what this investment will look like once disclosed and whether other sovereign wealth funds and central banks have already made similar moves.

When introducing their practices, one sovereign wealth fund stated that they must first persuade the investment committee and board, starting with a small scale, and only expand allocations once external perceptions and regulatory environments improve. Some resistance comes from concerns about the risks themselves. Many members with traditional financial backgrounds expressed that the volatility of crypto assets "really makes them hesitant," as even the less volatile crypto assets have relatively high annualized volatility. Another sovereign wealth fund recalled that even a simple relative value strategy was subject to direct scrutiny from the central bank: "To be honest, promoting our first crypto investment was really difficult."

At the same time, several sovereign wealth funds pointed out that their purpose for allocating crypto assets is not just to pursue returns. Holding crypto assets can also represent national strategy, signaling the country's intention to become a hub in this industry and aligning with the overall plan to build crypto infrastructure and improve regulation. One sovereign wealth fund described its allocation as a multi-year bet aimed at gaining global recognition rather than pursuing short-term returns.

This dual objective gives sovereign funds an unusual sustainability. Once the allocation is completed, even if investment returns are not ideal, strategic reasons may still support the institution's continued holding.

03 / Public Pensions

Assets Under Management: $1 billion to $10 billion Crypto Asset Allocation: 1.5% to 4.5% Investment Tools Used: Venture capital and hedge funds

The adoption of crypto assets by public pensions varies. The main reason is that public pensions are accountable not only to their boards but also to elected officials, beneficiaries, retirees, and local media, facing scrutiny greater than any other type of institution. Simply put, pensions are reluctant to allocate to crypto assets not because they lack investment value, but due to external pressures. A representative from one public pension told us that some people "would rather have mediocre performance as long as we don't appear in the news." In other words, the only thing worse than losing money is making money from crypto assets.

The pressure from public reaction is significant enough to prompt some pensions to adjust their practices. One team said they "decided not to accept media interviews anymore because crypto assets are extremely controversial among the public." The same team noted that public scrutiny "has not changed their allocation" and pointed out, "The trustees are very determined; they understand the investment logic and maintain their beliefs; despite facing various opposing voices, they still adhere to their original allocation and investment logic."

Nevertheless, pensions do hold crypto assets. One pension we spoke with stated that they "incorporate crypto assets into a broader innovative investment allocation, which also includes artificial intelligence, life sciences, space, and other innovative technologies." Most pensions initially aimed for a crypto asset allocation target of 1% to 2% of their portfolio, but some institutions saw their allocation ratio approach 7% due to strong asset performance. At the time of our interview, the holding ratio of the interviewed pension was 5% or below.

Clearly, concerns about public pressure affect whether pensions allocate to crypto assets and how they do so. Pensions that decide to allocate are more inclined to use non-public investment tools like venture capital and hedge funds, as these tools can be discreetly integrated into existing alternative asset classes without the need for public disclosure like ETF holdings, which may attract more attention.

04 / Multi-Family Offices and Investment Advisors

Assets Under Management: $1 billion to $50 billion Crypto Asset Allocation: 0% for non-profit institutions; family offices up to 13% (target allocation of 5%) Investment Tools Used: Venture capital, spot ETFs, and index funds

Multi-family offices and investment advisors (some of which also advise non-profit institutions) have vastly different views on holding crypto assets based on the type of client. When advising family clients, they often take a firm stance on allocation and evaluate crypto assets using the same fundamental and quantitative frameworks as they would for stocks or gold. When advising non-profit institutions, they tend to be much more cautious.

This ultimately comes down to different decision-making hierarchies. Family offices often only need to answer to one principal and can make decisions within a day; non-profit institutions are typically managed by committees that rely on consensus decision-making, and committee members often tend to follow peer benchmarks.

One interviewee summarized the resistance they frequently encounter in non-profit investment committees: "They will ask, what is this poison? Didn't Warren Buffett say it would drop to zero?" He then made a blunt judgment about future trends: "Our non-profit clients will not allocate based on performance on a chart. They will allocate because the next generation enters the committee."

This experience applies to our entire study: where one person can make decisions, crypto assets will be allocated; where consensus is needed from a committee, decision-making often stagnates. For family offices, career risk and public perception are usually not key factors, while these factors may cause public-facing institutions to hesitate. This is also why family offices often act first.

An investment advisor summarized the differences between the two types of institutions: "Our family clients are indeed ahead. They take the time to understand crypto assets, do not need an investment committee, and do not have those public image risks that would hinder them."

05 / Public Companies

Assets Under Management: Not applicable Crypto Asset Allocation: 1% to 10% of excess cash Investment Tools Used: Spot ETFs and direct custody

Public companies cover a wide range. On one end are digital asset reserve companies (DAT), whose purpose is to raise funds to purchase crypto assets; on the other end are crypto-native companies like mining firms and exchanges that hold crypto assets out of business necessity. In between, an increasing number of ordinary companies are beginning to view crypto assets as strategic reserves, typically accounting for 1% to 10% of excess cash.

The most noteworthy change in this group is that the resistance faced by companies holding crypto assets on their balance sheets has significantly decreased in recent years. A company's CFO told us that based on their experience, disclosing crypto asset holdings in regulatory filings or earnings calls has "become no big deal." The CFO's conclusion reflects the magnitude of the change in thresholds: "It feels like a very ordinary investment that a company can make."

Conclusion

At the beginning of this report, we posed a question: How do institutional investors view crypto assets? After dozens of hours of conversations with these decision-makers, some of whom are among the most seasoned and influential investors globally, we can conclude that this is no longer the most pressing question. Most of the institutions we interviewed are no longer debating whether crypto assets should enter their portfolios but are discussing how much to allocate, in what form, on what timeline, and what governance constraints need to be adhered to. The discussion has shifted from "whether to" to "how to."

This shift is the true finding of this report, its significance surpassing any single allocation data. Investment beliefs are built slowly and change slowly. Implementing allocations depends on processes, infrastructure, and determination, all of which are improving. Constraints may gradually ease, but investment beliefs will not change in the same way. The remaining obstacles are mostly not doubts about the assets themselves but issues of reputation, operations, and timing. We expect these obstacles to fade over time.

One of our key findings is that institutional adoption has a self-reinforcing effect: each allocation by a credible institution lowers the cost for the next institution to enter the market; one disclosure leads to more disclosures. Therefore, we believe that future development paths are more likely to be exponential rather than linear. Institutions that seem lagging today are often not skeptics who fundamentally reject crypto assets. They are simply cautious professionals waiting for more support and data, and these conditions are gradually arriving.

Of course, risks still exist. A severe crisis in the crypto industry could reset the process, and prolonged low returns or poor real-world adoption could weaken market interest or hinder ongoing due diligence.

But the future direction is not unclear. The institutions we spoke with painted a clear picture: institutional funds are systematically and long-term flowing into the crypto space. The process of institutional adoption of crypto assets is earlier than publicly available data suggests and more sustainable than the market perceives. Following this trend, we expect that within the next five years, most institutional investors will hold crypto assets.