Institutions Rewire Portfolios as Digital Assets Near 16% by 2028

Institutional investors are set to significantly increase their exposure to digital assets, with allocations expected to rise from 7% to 16% of total portfolios by 2028, according to State Street's 2025 Digital Assets Outlook. The report, based on a survey of senior executives in asset management and ownership firms, highlights a strategic shift toward blockchain-based investments, driven by tokenization, operational efficiency, and evolving regulatory frameworks Coindesk^[1]. Nearly 60% of respondents plan to boost their digital asset allocations within the next year, with most anticipating exposure to double over the next three years holder.io^[2].

Tokenization of private equity and fixed income is identified as the primary entry point for institutional adoption. By 2030, over half of institutions expect between 10% and 24% of their portfolios to be tokenized, enabling faster settlement times and enhanced liquidity for traditionally illiquid assets Bitcoin Magazine^[3]. Respondents cited transparency (52%) and cost savings (40%) as key advantages, with nearly half projecting efficiency gains exceeding 40% from digital asset infrastructure Coindesk^[1].

Operational shifts are also evident, with 40% of institutions already maintaining dedicated digital asset units and 20% planning to establish new teams. Blockchain integration is accelerating into broader digital transformation strategies, particularly in firms managing tokenized bonds, stablecoins, and central bank digital currencies Bitcoin Magazine^[3]. Generative AI and quantum computing are seen as complementary tools to further streamline operations, though tokenization remains the core focus Coindesk^[1].

Bitcoin continues to dominate institutional returns, with 27% of respondents identifying it as the top performer in their digital portfolios. While stablecoins and tokenized real-world assets account for the largest holdings, traditional cryptocurrencies are expected to retain their role as primary drivers of growth over the next three years Bitcoin Magazine^[3]. State Street's chief product officer, Donna Milrod, emphasized that clients are "rewiring operating models around digital assets," reflecting a strategic rather than merely technical transition Coindesk^[1].

Regulatory clarity, particularly in the U.S., has bolstered confidence. The SEC's August 2025 statement on liquid staking activities and broader efforts to modernize securities laws have reduced legal uncertainties, encouraging institutional participation Markets.FinancialContent.com^[5]. However, only 1% of respondents foresee most investments being tokenized by 2030, underscoring a cautious approach amid evolving infrastructure and compliance challenges Bitcoin Magazine^[3].

The findings align with broader market trends, including the launch of hybrid indices like S&P Global's Digital Markets 50, which combines cryptocurrencies and crypto-linked equities to diversify risk Crypto News .^[6]. Meanwhile, Asia's rapid adoption of stablecoins and corporate Bitcoin treasuries further signals a global shift toward digital assets .