Coinbase Survey: 83% of Institutions Plan to Increase Crypto Investments by 2025
News 2025-03-21

Institutions Expanding Crypto Exposure Amid Market Uncertainty

Despite recent market fluctuations, institutional interest in cryptocurrencies, altcoins, DeFi, and stablecoins continues to grow. According to a March 18 report by Coinbase and EY-Parthenon, 83% of surveyed institutions plan to increase their crypto allocation in 2025.

This study, conducted in January with 352 institutional decision-makers, found that 59% of respondents intend to allocate over 5% of their managed assets to crypto as regulatory clarity improves and new use cases emerge.

Many institutions believe that crypto will offer attractive risk-adjusted returns within the next three years, reinforcing long-term bullish sentiment.

Altcoin ETFs Could Boost Institutional Investments

The report also highlights that the approval of altcoin ETFs could drive institutional allocations to non-Bitcoin assets. Currently, the U.S. SEC is reviewing multiple altcoin ETF proposals, and if approved, they would provide institutions with a more convenient entry point.

According to Bloomberg Intelligence, the most likely altcoins to receive ETF approval in the short term include:

  • Litecoin (LTC)
  • Solana (SOL)
  • Ripple’s XRP

These assets have already gained traction in institutional portfolios, and ETF approvals could further accelerate adoption.

Institutions Increasing Exposure to Stablecoins & DeFi

Beyond Bitcoin and altcoins, institutional investors are increasingly allocating capital to stablecoins and DeFi applications. The report shows that 84% of surveyed institutions either hold or are actively evaluating stablecoins.

Institutions utilize stablecoins for:

✅ Yield Generation (73%) – Engaging in DeFi lending, staking, and yield farming.

✅ Forex Trading (69%) – Using stablecoins for international payments and currency exchanges to reduce costs.

✅ Treasury Management (68%) – Holding stablecoins for corporate liquidity and short-term financial management.

✅ Cross-Border Payments (63%) – Leveraging stablecoins to improve settlement efficiency.

Meanwhile, only 24% of institutional investors currently use DeFi platforms, but this number is expected to grow to nearly 75% within the next two years.

Crypto Firms Seeking Banking Licenses Amid Regulatory Shifts

A Reuters report indicates that multiple crypto and fintech firms are applying for banking licenses in the U.S., aiming to leverage a potentially more favorable regulatory environment under a new Trump administration.

Advantages of Obtaining a Banking License:

🏦 Enhanced Credibility – A banking charter increases institutional and corporate trust.

💰 Lower Capital Costs – Licensed firms can accept deposits, reducing dependence on traditional banks and external financing.

📈 Expanded Financial Services – Crypto firms can offer loans, payment services, and other regulated financial products.

However, obtaining a banking license remains challenging as U.S. regulators have significantly tightened approval processes since the 2008 financial crisis.

📊 Banking License Approvals:

  • 2000-2007: 144 licenses granted per year
  • Post-2008: Only ~5 licenses granted annually

Despite these hurdles, some crypto firms have successfully secured banking licenses:

  • Kraken (2020) – Received a Wyoming banking charter, becoming the first regulated crypto bank.
  • Anchorage Digital Bank (2021) – Granted a federal banking charter by the U.S. Office of the Comptroller of the Currency (OCC).
  • Nexo (2022) – Acquired a stake in a federally licensed U.S. financial institution.

However, U.S. regulatory agencies remain cautious, as obtaining a banking license requires compliance with AML (Anti-Money Laundering) laws, the Bank Secrecy Act (BSA), and other traditional financial regulations. This presents a potential conflict with crypto’s decentralized ethos.

Conclusion: Institutional Crypto Adoption on the Rise

🔹 83% of institutions plan to increase crypto investments by 2025.

🔹 Altcoin ETFs could drive further institutional inflows.

🔹 Stablecoins & DeFi adoption is accelerating among institutions.

🔹 Crypto firms are pursuing banking licenses to expand financial services and enhance market legitimacy.

While regulatory uncertainty remains, growing institutional participation signals a long-term bullish outlook for the crypto industry.