Institutional investors double down on crypto but with tighter risk controls

Institutional investors are preparing to increase exposure to digital assets in 2026 even as recent market turbulence pushes firms to strengthen governance, risk management and regulatory due diligence, according to a new global survey.

Nearly three quarters of institutional decision makers surveyed  by EY-Parthenon and Coinbase said they plan to boost digital asset allocations this year, underscoring continued long term conviction in the asset class despite volatility. At the same time, 49% said recent market swings have prompted greater emphasis on liquidity management, position sizing and broader risk controls.

The findings reflect a shift in institutional crypto investing from experimentation toward more structured portfolio integration. Investors are increasingly prioritizing governance frameworks, operational resilience and compliance standards alongside return expectations.

Regulated access becomes the institutional gateway

ETFs and other registered investment vehicles are now the dominant channel for institutional crypto exposure.

Two thirds of respondents reported gaining exposure through spot crypto ETFs or exchange-traded products, while more than 80% prefer accessing the market through regulated wrappers. This preference signals growing demand for investor protections and clearer compliance obligations as participation scales.

Regulatory clarity is also emerging as a key catalyst: 65% of institutions planning to increase holdings cited improved rulemaking confidence as a major driver. But roughly 66% identified regulatory uncertainty as their top concern when investing in digital assets, highlighting persistent hesitation around market structure, licensing and stablecoin oversight.

Volatility reshapes strategy — not conviction

Institutional investors appear to be adapting their approach rather than retreating from the market. One respondent noted, “Market swings made us more careful, and [led us to] keep exposure small, preferring diversified and indirect routes instead of direct crypto bets.”

Another said, “[Volatility] led to more of a risk-averse approach and enhanced focus toward governance, compliance and client protection.”

A third respondent described volatility as an opportunity, stating, “Volatility created better entry points and encouraged a more selective risk-managed approach without altering our overall allocation plans.”

These responses illustrate how institutions are balancing tactical adjustments with sustained strategic interest. Overall, 74% of investors expect cryptocurrency prices to rise over the next 12 months, and nearly 60% view the asset class as one of the top three opportunities for attractive risk-adjusted returns over the next three years.

Stablecoins and tokenization move into the mainstream

The survey also highlights growing institutional engagement with blockchain-based market infrastructure. Around 86% of respondents already use or are interested in using stablecoins, particularly for settlement, treasury management and real-time payments.

Tokenization is gaining momentum as well. Nearly two thirds of investors expressed strong interest in allocating to tokenized assets, citing faster trading, improved liquidity and access to new investment opportunities. More than 60% expect tokenization to significantly reshape trading, clearing and settlement processes in the coming years.

Institutional investors are also raising the bar for service providers. Regulatory compliance and security protocols have surged in importance when selecting custodians, each cited by roughly 66% of respondents — a dramatic increase from the prior year.

Many firms are adopting multi-custodian models to mitigate risk and enhance operational flexibility. In parallel, institutions are investing in trading capabilities, custody expertise and partnerships with crypto-native firms to build out infrastructure and internal knowledge.

As regulatory clarity improves and market structure evolves, institutional participation is likely to expand, but with heightened scrutiny on risk transparency, compliance and operational execution.