Coinbase Survey: 83% of Institutions Plan to Increase Crypto Investments by 2025

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.