Institutional investors have maintained their cryptocurrency exposure despite significant market volatility, according to a survey conducted by Bitwise of 15 major institutions. The research found that none of the surveyed investors cut their allocations during a period when the market declined by approximately 50%.
Crypto allocations among the institutions surveyed remain modest, ranging from 0.5% to 13% of investable assets, with most holding between 1% and 2%. These holdings span multiple vehicles including exchange-traded funds, direct crypto holdings, venture capital investments, and hedge funds.
Debate Shifts to Allocation Strategy
Rather than questioning whether to invest in crypto, the discussion among institutions has shifted to how much to allocate and which investment vehicles to use. Some institutions are maintaining their current targets while others continue working toward higher allocations. Several investors are moving away from illiquid private placements and adding market-neutral strategies to reduce volatility and streamline internal approval processes.
Bitcoin Dominates Institutional Holdings
Bitcoin remains the strongest conviction among institutional investors, with every institution owning crypto also holding BTC. Many view it as a store of value and hedge against currency debasement, often comparing it to gold. Some institutions hold Bitcoin as a standalone position, while others use a market-cap-weighted basket approach that allocates approximately 80% of their crypto exposure to BTC.
Ethereum and Solana receive different treatment from institutions. Those holding these assets typically maintain smaller positions with shorter investment timelines. Institutional decisions regarding these tokens are tied to specific adoption and value-accrual expectations. Some investors avoid them entirely, citing a lack of clear connection between blockchain activity and token value, while others treat them as venture-style technology bets, monitoring real-world usage, transaction activity, and fees.
ETFs Reshape Market Entry
Spot crypto exchange-traded funds have significantly altered how institutions access the market. Nearly every institution interviewed either currently uses these funds or plans to. Several investors have transitioned from direct crypto custody to ETFs, citing lower costs, reduced operational burden, and simpler reporting requirements.
However, not all institutions are adopting ETFs. Some face regulatory restrictions preventing them from holding spot commodities through ETFs, while others prefer direct asset control and are building proprietary custody systems. One institution raised concerns about public disclosure of ETF holdings through regulatory 13F filings.
