Over half of institutional investors plan to double their investments in cryptocurrencies like Bitcoin within the next three years, according to a new report from State Street.
The findings are part of the firm’s 2025 Digital Assets Outlook. The report highlights that asset managers and owners are shifting from merely experimenting with digital assets to fully integrating them into their investment strategies.
Tokenizing Private Markets Is the First Big Use Case
Notably, the report states that institutions are likely to begin using blockchain by tokenizing private equity and fixed income assets.
For context, tokenization allows traditionally illiquid assets, such as real estate, private company shares, to be converted into digital tokens on a blockchain.
This process makes such assets easier to trade, divide into smaller portions, and update in real time. Notably, State Street found that by 2030, most respondents expect that 10% to 24% of their portfolios will be tokenized.
Institutions Expect 40% Cost Savings from Blockchain Adoption
Transparency, efficiency, and cost reduction are among the key drivers behind blockchain adoption.
Over half of those surveyed cited greater visibility into asset data as a major advantage. Meanwhile, nearly one in two respondents anticipates cost savings of at least 40% by adopting digital asset infrastructure.
40% of Firms Now Have Dedicated Digital Asset Units
Donna Milrod, State Street’s Chief Product Officer, emphasized that more clients are redesigning their operations to incorporate digital assets. Many already have dedicated teams in place, and nearly one in five more plan to do the same.
Specifically, State Street revealed that 40% of institutions now have teams focused on digital assets.
This move encompasses a wide range of innovations. They include tokenized bonds and stocks, on-chain wrappers, Central Bank Digital Currencies (CBDCs), stablecoins, and tokenized cash. Milrod notes that this is not just a tech upgrade but a major strategic transformation across the entire industry.
Institutional Investors Already Hold Billions in Crypto
Institutional investors have already established a significant presence in the crypto space through ETFs and corporate treasuries. ETFs now hold over $188 billion in Bitcoin. Meanwhile, public firms hold $118 billion in BTC, and private firms hold $51 billion.
With digital asset investments projected to double by 2028 and tokenized markets expanding, the future of crypto adoption will be shaped more by large-scale institutional moves than by retail enthusiasm.
New Tech Working Together
The research also notes that many institutional leaders see generative AI and quantum computing as complementary technologies that could further streamline and automate investment operations.
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