Cost Savings and Liquidity Drive Institutional Crypto Surge

Institutions are set to significantly boost their digital asset allocations, with State Street's 2025 global research indicating that nearly 60% of institutional investors plan to increase their crypto exposure in the next year. The firm projects that average institutional exposure to digital assets could double within three years, reaching 16% by 2028 Institutions Plan to Double Digital Asset Allocation by 2028^[1]. This shift reflects a broader move beyond pilot projects toward substantial investments in blockchain and tokenized assets.

Private markets are a focal area for institutional adoption, with tokenization of private equity and fixed income leading efforts to enhance liquidity and tradability. By 2030, up to 24% of institutional investments could be allocated through tokenized instruments. Key drivers include improved transparency, faster trading, and reduced compliance costs, with nearly half of investors expecting cost savings exceeding 40% from tokenization Institutions Plan to Double Digital Asset Allocation by 2028^[1].

Operational adaptations are already underway, as 40% of firms have established dedicated digital asset teams or units. Blockchain integration into broader digital strategies is evident in nearly a third of institutions, while 20% plan to launch new digital asset groups in the near term. Product development is accelerating, with initiatives including tokenized bonds, on-chain wrappers, stablecoins, and tokenized cash. Generative AI and quantum computing are also being explored to complement tokenization efforts in investment operations Institutions Plan to Double Digital Asset Allocation by 2028^[1].

The press release highlights a strategic realignment as institutions prioritize long-term capital allocation to digital assets. This trend aligns with broader market dynamics, including regulatory clarity and technological advancements, positioning digital assets as a core component of institutional portfolios by the late 2020s.