Major Institutions Reveal Plans to Double Crypto Holdings by 2028

TLDR

• Institutional portfolios currently hold 7% in digital assets, expected to reach 16% by 2028 according to State Street survey of 300+ investors
• Bitcoin and Ethereum deliver the highest returns despite stablecoins and tokenized assets making up the bulk of current holdings
• Asset managers show twice the exposure to crypto compared to asset owners, with 14% holding 2-5% of portfolios in Bitcoin
• 69% of institutional investors plan to increase digital asset allocations over the next three years
• 43% expect hybrid decentralized and traditional finance systems to become mainstream within five years, up from 11% last year

Institutional investors are increasing their commitment to digital assets. A new State Street report shows portfolios currently allocate 7% to digital assets on average. This figure is projected to double to 16% by 2028.

The survey polled over 300 institutional investors globally. State Street Corporation oversees approximately $49 trillion in assets under custody or administration. The research was conducted with Oxford Economics.

Digital cash and tokenized versions of listed equities represent the most common holdings. Respondents allocate about 1% of their portfolios to each category. Asset managers demonstrate higher exposure levels compared to asset owners.

Asset managers are twice as likely to hold 2-5% of their portfolios in Bitcoin. The data shows 14% of managers versus 7% of owners at this allocation level. Five percent of managers hold 5% or more in Bitcoin compared to 4% of owners.

Returns Driven by Cryptocurrencies

Bitcoin delivers the highest returns for 27% of survey participants. Ethereum ranks second at 21% for current return generation. A quarter of respondents expect Bitcoin to maintain this performance over the next three years.

Stablecoins and tokenized real-world assets form the largest portion of allocations. However, cryptocurrencies remain the primary return generators in digital asset portfolios. Asset managers show six times more exposure to Ethereum at the 5% or higher allocation level compared to owners.

Tokenized assets see different adoption rates between managers and owners. Managers report 6% exposure to tokenized public assets versus 1% for owners. Private asset tokenization shows 5% for managers and 2% for owners.

Blockchain and AI Integration

Blockchain technology is integral to transformation plans for 29% of respondents. Nearly all surveyed companies have launched or are planning strategies using advanced technologies. These initiatives focus on automating processes and improving interoperability.

Institutions are extending blockchain use beyond investment operations. Sixty-one percent apply it to cash flow management. Sixty percent use it for business data processes while 31% deploy it for legal or compliance functions.

Forty-five percent of respondents believe recent advances in generative AI will accelerate digital asset development. GenAI tools can build smart contracts and blockchains more quickly. These technologies are viewed as complementary foundations for digital transformation.

Cautious Outlook on DeFi Integration

Forty-three percent expect hybrid decentralized and traditional finance operations to become mainstream within five years. This represents a jump from 11% in the previous year’s survey. However, skepticism about full replacement of traditional systems has grown.

Fourteen percent of respondents don’t believe digital investment systems will ever fully replace traditional trading and custody. This figure increased sharply from 3% in 2024. The data suggests institutions favor gradual integration over complete transformation.

By 2030, 52% anticipate digital assets or tokenized instruments will comprise 10-24% of all investments. Only 1% predict the majority of investments will be conducted through digital or tokenized instruments. Most institutions expect crypto assets to become mainstream within the next decade.

Bitcoin is currently trading at $122,670 and attempting to consolidate above $120,000. The cryptocurrency aims to establish this level as new support for potential further gains.

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