Coinbase Study: 83% of Institutions Plan to Increase Cryptocurrency Investments by 2025

By: blockbeats|2025/03/19 06:15:03
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Original Article Title: "Coinbase Survey: 83% of Institutions Plan to Increase Cryptocurrency Investments by 2025"
Original Article Author: Arthur Wang, BlockTempo

According to a report released yesterday (18) by Coinbase and consulting firm EY-Parthenon, institutional investors' interest in cryptocurrency continues to grow despite the recent market downturn, with 83% of surveyed institutions planning to increase their cryptocurrency allocations by 2025.

The study surveyed 352 institutional decision-makers in January, finding that as regulations become clearer and more use cases emerge, their confidence in digital assets is increasing. 59% of respondents plan to allocate more than 5% of their managed assets to cryptocurrency by 2025.

These institutions generally believe that cryptocurrency will provide "an attractive risk-adjusted return" in the next three years, hence their sustained optimism towards the sector.

Altcoin ETF Could Drive Institutional Investment

On the other hand, the report also notes that if the U.S. regulatory authorities approve an altcoin ETF for listing, institutional investors' allocation to altcoins may further increase.

Currently, the U.S. Securities and Exchange Commission (SEC) is reviewing proposals for over a dozen altcoin ETFs, with market expectations suggesting that approval could provide a more convenient avenue for institutional funds to enter this market.

According to Bloomberg Intelligence analysis, Litecoin, Solana, and Ripple are the most likely candidates to be approved in the short term, and these assets have already become popular choices in institutional portfolios.

Institutional Funds Flowing into Stablecoins and DeFi

Meanwhile, stablecoins and decentralized finance (DeFi) are also attracting institutional investors' attention. The report indicates that 84% of surveyed institutions either hold stablecoins or are evaluating their applications.

Institutional investors use stablecoins for various purposes, including:

· Yield Generation (73%): Participating in DeFi lending, staking, and yield farming using stablecoins.

· Foreign Exchange (Forex) Trading (69%): Utilizing stablecoins for international payments and remittances to reduce transaction costs and time.

· Internal Fund Management (68%): Incorporating stablecoins into company financial management as a short-term fund allocation tool.

· External Payments (63%): Utilizing stablecoins for cross-border payments to enhance settlement efficiency.

Additionally, it is worth noting that only 24% of institutional investors are using DeFi platforms, but the report indicates that this figure is expected to grow to nearly 75% in the next two years.

Cryptocurrency Companies Seek Banking Licenses to Tackle Financial Regulatory Challenges

According to a Reuters report, many cryptocurrency and fintech companies are applying for banking licenses in the United States, hoping to obtain legitimate banking status in the relatively relaxed regulatory environment of the new Trump administration.

The advantages of obtaining a banking license include:

· Enhanced Market Trust: Companies holding a banking license will gain more trust from institutions and corporate users.

· Reduced Cost of Funds: After obtaining a banking license, companies can accept deposits, reducing reliance on traditional banks or external financing.

· Expansion of Financial Services: Obtaining a banking license will enable cryptocurrency companies to offer a more diverse range of financial products, such as loans and payment services.

However, obtaining a banking license is no easy feat. According to Reuters data, since the 2008 financial crisis, the United States has approved an average of only 5 banking licenses per year, far below the annual average of 144 between 2000 and 2007.

Despite facing stringent regulatory requirements, some cryptocurrency companies have successfully obtained banking licenses, such as:

· Kraken: Obtained a banking license from the state of Wyoming in 2020, becoming the first compliant crypto bank.

· Anchorage Digital Bank: Approved by the U.S. Office of the Comptroller of the Currency in 2021, becoming a federally chartered bank.

· Nexo: Acquired shares of a financial institution holding a U.S. federal banking license in 2022.

However, the market is still watching the stance of U.S. regulatory agencies, as obtaining a bank charter represents that cryptocurrency companies need to comply with traditional financial regulations such as Anti-Money Laundering (AML), Bank Secrecy Act (BSA), which may conflict with the decentralized spirit of cryptocurrency.

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