Institutional investors are increasingly doubling down on their crypto ambitions, with 83% planning to boost their digital asset holdings in 2025, according to a March 18 report by Coinbase and consultancy firm EY-Parthenon. The report, based on interviews with over 350 institutional investors conducted in January, highlights a shifting landscape where cryptocurrencies are being viewed as a prime opportunity for risk-adjusted returns over the next three years.
Interestingly, nearly three-quarters of the surveyed firms already hold cryptocurrencies beyond the usual Bitcoin and Ethereum staples. Popular altcoins such as XRP and Solana (SOL) have emerged as top institutional picks, and their presence could increase further if US regulators approve altcoin ETFs in the coming months.
According to Bloomberg Intelligence, Litecoin (LTC), Solana, and XRP are the most likely candidates for near-term ETF approval. Meanwhile, the Chicago Mercantile Exchange (CME) recently launched futures contracts tied to SOL on March 17, marking a significant step toward institutional adoption of the altcoin.
Stablecoins and DeFi See Rising Institutional Interest
The survey also revealed a growing appetite for stablecoins, with 84% of respondents either holding or actively exploring stablecoin usage. Institutions are no longer simply using stablecoins to facilitate crypto transactions. Instead, they are increasingly leveraging them for foreign exchange (69%), internal cash management (68%), and external payments (63%).
Moreover, 73% of the respondents noted that they are using stablecoins to generate yield, highlighting the growing interest in crypto-based financial products for portfolio diversification.
In parallel, decentralized finance (DeFi) platforms are also gaining traction. Although only 24% of institutions currently use DeFi, the report predicts this figure will triple to nearly 75% within the next two years. Institutions cited staking, derivatives, and lending as their primary use cases, followed by cross-border settlements, yield farming, and altcoin access.
A Broader Market Shift
The findings signal a notable shift in institutional crypto strategies, with altcoins, stablecoins, and DeFi emerging as key areas of interest. As US regulators deliberate on ETF approvals and platforms like CME expand futures offerings, the institutional footprint in the crypto market appears set for significant growth.
This could pave the way for greater liquidity, reduced volatility, and enhanced market stability in the years ahead.
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