In January 2025, EY-Parthenon and Coinbase collaborated on a survey involving over 350 institutional investors globally, unveiling critical insights into the future of digital assets. Regulatory clarity is projected to be a significant driver of growth within the digital landscape in 2025, with survey respondents identifying it as the top catalyst. Beyond regulatory considerations, the findings reveal a strong enthusiasm and appetite for innovative solutions capable of advancing the market. Both institutional and retail investors are actively seeking new crypto-powered products and services that can generate yield, facilitate access to credit, streamline cross-border payments, enhance transactional efficiency, and support long-term wealth growth.
As the digital asset ecosystem matures, traditional finance (TradFi) institutions are well-positioned to leverage their extensive experience and established reputations to offer secure, innovative investment vehicles to their clients. A more accommodating regulatory environment is expected to empower digital innovators to accelerate development, fostering decentralized finance use cases tailored for both forward-thinking clients and a new generation of financial consumers.
Investors Demand Greater Access to Digital Assets
The survey indicates that a substantial 87% of participants plan to increase their allocations to cryptocurrencies in 2025, reflecting interest in a variety of avenues such as exchange-traded products (ETPs), investments in digital asset companies, stablecoins, futures, and thematic mutual funds. Notably, while many investors express a preference for gaining exposure to crypto through regulated vehicles like ETPs, there is growing interest in expanding custody options to hold spot cryptocurrencies directly. Findings show that 55% of investors currently hold spot crypto via ETPs, with 69% intending to utilize registered vehicles for their future holdings. Earlier in 2024, certain bitcoin ETPs emerged as the fastest-growing options across a range of altcoins like Solana (SOL) and Ripple (XRP).
Innovative Prospects with Stablecoins and Tokenization
Institutional investors are increasingly exploring opportunities to enhance payment solutions and generate rewards through mechanisms such as staking and yield generation. A notable 84% of surveyed investors either use or plan to employ stablecoins, with Tether (USDT) and USD Coin (USDC) identified as the top choices. Stablecoins have the potential to revolutionize foreign currency exchanges and cash management by enabling instantaneous settlement, thereby reducing associated risks and enhancing various use cases.
Moreover, tokenization is set to democratize access to investment opportunities for retail investors while providing institutions with new funding sources. Over half of the respondents indicated plans to invest in tokenized assets, signaling a desire for greater investment precision via fractional ownership and lower minimum investments—ultimately fostering more opportunities and better risk management. At the forefront of investor interest in tokenization are alternative assets like real estate, private equity, private credit, and even commodities such as gold and oil, which traditionally cater to institutional or ultra-high-net-worth investors but are becoming increasingly accessible to retail participants through tokenization.
The innovative spirit that has historically propelled Wall Street continues to shape the expectations of investors regarding digital assets. Stakeholders anticipate that these assets will not only integrate into mainstream financial experiences but also unlock new avenues for participation in an evolving decentralized financial ecosystem. Supported by a more favorable regulatory landscape for cryptocurrency in the U.S., investors around the globe are optimistic about the rapid introduction of new products and services that will signal a renaissance in the digital asset space.
Note: The views expressed in this article are solely those of the author(s) and do not necessarily reflect the opinions of Ernst & Young LLP or other members of the global EY organization.