Why Institutions Keep Buying Through Volatility
A record wave of institutional money is pouring into digital assets this year, driven by the maturing exchange-traded fund (ETF) market, improving custody standards, and a growing appetite for tokenized real-world assets. Sygnum’s newly released “Future Finance 2025” survey of more than 1,000 professional and high-net-worth investors shows that 61 % intend to boost their crypto exposure before year-end, with nearly two-fifths planning fresh allocations in the final quarter alone.
This surge follows October’s sharp correction—almost 20 billion USD in market value evaporated in less than a week—yet confidence appears undented. Survey participants framed the sell-off as a “stress test” that strengthened conviction, underscoring a shift from speculative trading to strategic diversification. Report author Lucas Schweiger notes that institutions now view digital assets “less as hedge, more as participation in the structural evolution of global finance.”
Evidence of that evolution is visible on-chain. CryptoNews analysis of blockchain data providers finds that large entities and regulated funds have accumulated more than seven million BTC since spot ETF approvals in January 2024. Retail ownership, once 17 % of supply, has fallen roughly one-fifth over the last twelve months as coins migrate into institutional wallets for tax, compliance, and reporting advantages. Simultaneously, interest in tokenized bonds, funds, and money-market instruments has quadrupled year-on-year, making tokenization the preferred on-ramp for conservative allocators.
The 2026 Question: Liquidity, Regulation, and Market Concentration
While 55 % of Sygnum’s respondents remain short-term bullish—citing pending U.S. rate cuts, China’s fiscal stimulus, and the prospect of staking-enabled ETFs—the mood darkens beyond 2025. Both Sygnum and Coinbase’s latest “Navigating Uncertainty” survey warn that liquidity tailwinds may fade as central-bank easing plateaus and fiscal support moderates. Nearly half of surveyed institutions expect a neutral or outright bearish backdrop by mid-2026.
Two structural risks dominate their outlook. First is market concentration: the top cohort of exchange-traded products and treasury-style wallets now commands a historically high share of bitcoin supply, intensifying drawdown potential if profit-taking accelerates. Second is policy uncertainty. A prolonged U.S. government shutdown has already stalled more than a dozen crypto-related rulemakings and ETF applications, slowing the rollout of broader-based funds that many allocators deem crucial for further diversification.
Even so, the appetite for innovations such as tokenized treasuries, yield-bearing stablecoins, and on-chain fund shares suggests that a slowdown would represent consolidation rather than capitulation. Sygnum frames 2025 as a year of “powerful demand catalysts tempered by regulatory caution,” forecasting that institutional share of crypto market capitalisation will continue to climb even if overall growth decelerates.
What to Watch Next
Market participants are tracking three catalysts that could determine whether 2026 brings a gentle cooling or a sharper downturn: (1) approval timelines for staking-enabled and multi-asset ETFs; (2) the pace of global rate-cut cycles relative to inflation; and (3) the scalability of tokenized real-world-asset rails inside existing banking infrastructure. Should two or more break positively, the current cycle could extend; if all stall, the “measured risk” mindset Sygnum describes may morph into defensive positioning.
For now, the data paint a nuanced picture: institutions are buying bigger, diversifying wider, and planning further integration of blockchain rails—yet they are doing so with one eye firmly on the exit conditions of 2026.
