Ey-Parthenon and Coinbase conducted a study of more than 350 institutional investors globally in January 2025. While regulatory clarity will weave greatly on the development of the digital assets landscape of 2025 investors in the study called it No. 1 Catalyst for the Growth Study illustrates underlying enthusiasm and an appetite for innovation that will drive the market forward. Both institutional and retail investors are looking for new crypto-driven products and services to generate dividends, provide access to credit and lending services, complete cross-border payments, immediately clear transactions and grow long-term wealth.
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As the ecosystem matures and continues to take shape, we will see traditional funding companies (Tradfi) exploit decades of experience and reputation to securely offer new investment vehicles and products to clients. A friendlier legislative background will allow digital natives to innovate faster and push decentralized financing cases forward by cating to both progressive customers and a new generation of financial customers.
Investors want more digital assets and more options
Of the investors surveyed, 87% plan to increase the total grants to crypto in 2025, which spans a number of options, such as exchange -traded products (ETPs), investments in digital asset companies, stableecoins, futures and thematic mutual foundations. While many said they prefer to get their exposure to crypto through registered vehicles such as ETPs, there is also an interest in expanding custody to offer and keeping the spot crypto directly. According to the survey, 55% spot -crypto through ETPs holds with 69% of those planning to own Spot Crypto planning to do so using registered vehicles. Earlier in 2024, some of the Bitcoin ETPs became the fastest growing ETPs across a spectrum of Altcoins, including Solana (Sun) and Ripple (XRP).
New innovation with stableecoins and tokenization
Institutional investors look at the opportunities to run new payment platforms and enjoy rewards through the generation of efforts and dividends. Tire-Fir’s percentage of investors surveyed said they are using or planning to use stablecoins where Tether (USDT) and USD-coin (USDC) are the top two preferred coins. Stablecoins promise to clear immediate, modernizing and reduce the risk in currency exchange, cash management and a number of other use cases.
Tokenization also promises to democratize access to investment opportunities for the retail investor and provide new sources of capital to institutions. More than half of the investors surveyed are planning to invest in tokenized assets. The ability to diversify investments with a greater precision level with fractional ownership and lower minimum will provide greater opportunities and improve risk management. At the top of the investors’ wish list for tokenization are alternative assets such as real estate, private equity, private credit and even raw materials such as gold and oil. These are investments that are typically reserved for institutions or clients with high net value that may be available to new retail investors through tokenization.
Innovation has always driven Wall Street forward. There is an expectation from investors that digital assets will not only move into the sphere of mainstream customer experience, but also provide new opportunities to participate in a growing decentralized financial system. Anchored based on a friendlier legislative attitude towards crypto in the United States, investors are expecting globally new products and services to accelerate a renaissance in digital assets.
Note: The views reflected in this article are the views of the author (s) and do not necessarily reflect the views of Ernst & Young LLP or other members of the global EY organization.
