A new report from Coinbase and EY-Parthenon shows that a growing number of institutional investors are planning to increase their cryptocurrency holdings this year.
Growing Interest in Cryptocurrencies
According to the report, 83% of institutional investors are planning to increase their cryptocurrency allocations. Over half of the respondents (59%) intend to allocate at least 5% of their assets under management to crypto by 2025, indicating a shift toward viewing digital assets as a core investment asset.
Stablecoins on the Rise
Stablecoins are gaining momentum, with 84% of institutional investors either using them or considering their adoption. These assets are being explored for cash management, payments, yield generation, and foreign exchange transactions.
DeFi and Regulatory Challenges
Institutional engagement with decentralized finance (DeFi) is also set to surge. Currently, only 24% of surveyed investors are involved in DeFi, but that figure is projected to hit 75% within two years. However, challenges such as regulatory uncertainty (52%), market volatility (47%), and secure custody (33%) remain as hurdles for institutional investment.
The report highlights the growing interest of institutional investors in cryptocurrencies and stablecoins. Despite challenges like regulatory barriers, clear regulations, and market stability play crucial roles in the further market expansion.
