Institutional investors are proving more resilient in their crypto holdings than many market observers expected, according to a new report from Bitwise Asset Management. The San Francisco-based firm, which manages roughly $9 billion in client assets, released its first Institutional Crypto Adoption study on Tuesday, based on in-depth interviews with senior investment professionals at 15 of the world's largest institutions, including endowments, public pension funds, sovereign wealth funds, foundations, multi-family offices, and public companies.
The study's central finding: during a market drawdown of approximately 50% between October 2025 and April 2026, not one of the interviewed institutions reduced its crypto allocation. Several actually increased their positions. Matt Hougan, Bitwise's chief investment officer, noted that when asked what would prompt them to exit, none cited price. "This cuts against the common assumption that institutions are weak hands in a crypto drawdown," he said.
Bitcoin's unique status
Bitcoin emerged as the only asset held by every institution in the study that has crypto exposure. It is typically the first, largest, and longest-held position, with most institutions framing it as a store of value and pairing it with gold as a hedge against fiat currency debasement. One large endowment told researchers, "People are starting to use bitcoin as a fiat debasement trade along with gold." Allocation sizes ranged from 0.5% to 13% of investable assets, with most between 1% and 2%, spread across spot ETFs, direct ownership, venture capital, and hedge funds.
Ethereum and Solana occupy a different category. Institutions holding these assets tend to have smaller positions, shorter time horizons, and explicit exit conditions tied to whether real-world adoption translates into token value within a few years. Several institutions hold none of these assets, citing difficulty in identifying a clear mechanism by which user activity accrues value to the token.
Spot ETFs reshape access
The approval of spot crypto ETFs in the U.S. beginning in January 2024 has changed how institutions enter the asset class. Nearly every institution interviewed either uses spot ETFs or plans to, citing lower operational costs, simpler custody, and better integration with back-office systems. Ryan Rasmussen, Bitwise's head of research, noted that the institutional manager landscape is highly concentrated. One sovereign wealth fund said, "It was really hard to find managers that meet our minimum requirements for size, established track record, and operational infrastructure. We found around ten names."
The report also highlights a measurement issue: some institutions deliberately choose vehicles that do not trigger 13F public disclosure requirements. As a result, estimates of institutional crypto ownership based on 13F filings should be treated as a floor, not a ceiling. This aligns with broader advisor adoption trends, where platform access and custody improvements have been key drivers, as noted in recent advisor technology surveys.
Operational barriers remain
For institutions that have not yet allocated, the obstacles are rarely fundamental objections to crypto. Instead, they face challenges fitting crypto into existing investment policy frameworks, navigating board and committee approvals, and managing reputational risk. Governance timelines vary widely: some endowments allocated based on the conviction of the CIO and a small team, while one sovereign wealth fund described a process scrutinized by the country's central bank leadership, with focus on perception and peer validation rather than the investment case.
These barriers are falling, the report suggests. Spot ETF approvals, improving regulatory clarity under the current U.S. administration, and growing peer disclosure are lowering the cost of entry. Bitwise's research team expects a majority of institutional investors to hold crypto within five years. This view is consistent with the eighth annual Bitwise/VettaFi survey of financial advisors, which found that 32% of advisors allocated to crypto in client accounts in 2025, up from 22% the prior year.
Hougan concluded, "The institutions we interviewed have largely stopped debating whether crypto belongs in a portfolio. They are instead debating how much, in what form, on what schedule, and under what governance constraints. The debate has moved from 'if' to 'how.'"
