A recent survey reveals that institutional investors are increasing their exposure to cryptocurrencies.
According to a survey conducted by Coinbase in collaboration with EY-Parthenon, 83% of institutional investors expect to expand their digital asset allocation over the course of the year.
Confidence in the market
The research, which involved 352 financial decision-makers interviewed in January, highlights growing confidence in the future of the digital asset industry.
A notable finding is that 59% of institutional investors plan to allocate more than 5% of their assets under management (AUM) to the crypto market by 2025.
Stablecoins and DeFi: new frontiers for institutions
According to the survey results, stablecoins continue to gain traction among institutions, with 84% of respondents currently using or considering using them for purposes beyond simple transactions. Yield generation (73%), currency exchange operations (69%), and internal liquidity management (68%) were identified as the main drivers of adoption.
Decentralized finance (DeFi), while still in its early stages among institutions, is set for significant growth. Currently, 24% of professional investors are involved in DeFi, but this percentage is expected to triple, reaching 75% by 2027, according to the report.
Regulation: the main challenge
Despite positive prospects, regulatory uncertainty remains a concern for institutions, the survey states. 52% of respondents identified regulation as the biggest obstacle, followed by volatility (47%) and asset custody security (33%). 68% of institutions believe that greater regulatory clarity will be the main catalyst for the next wave of professional adoption in the sector.
