Research on the configuration of 351 leading institutions in cryptocurrency: driven by volatility, not retreat

Overview of Report Content

Will the intense volatility in the crypto market drive institutional investors away or motivate them to establish more sustainable engagement frameworks? The joint report “2026 Institutional Investor Digital Assets Survey” by Coinbase and EY-Parthenon provides a clear answer: volatility drives discipline, not retreat.

Data from 351 global institutional decision-makers show that institutional crypto participation in 2026 is undergoing three parallel evolutions:

• Regulated products become the default channel — ETF/ETP penetration rises to 66%, with 81% preferring registered vehicles

• Operational infrastructure becomes embedded in core processes — stablecoins shift from trading tools to internal cash management, tokenization moves from experimentation to scaled deployment

• Risk governance frameworks tighten across the board — regulatory compliance in custody choices jumps from 25% to 66%, with 49% strengthening risk management due to volatility

Regulatory clarity runs through each layer of evolution: it is the primary driver for 65% of institutions increasing allocations and the biggest concern for 66%. This tension defines the current competitive logic — institutions are waiting for “more credible ways to participate.”

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Core Findings: The Coexistence of Discipline and Conviction

A seemingly contradictory phenomenon defines the mindset of institutions in 2026: nearly half tighten risk controls due to volatility, while over 70% plan to increase allocations. 49% of respondents say high volatility has strengthened risk management, liquidity, and position controls; yet 73% still plan to increase digital asset holdings, and 74% expect prices to rise over the next 12 months. This is not hesitation but maturity — bearing larger exposures with more rigorous governance frameworks.

This “cautiously optimistic” institutional stance is reflected in a fundamental shift in entry methods. 66% gain exposure through spot ETFs/ETPs, 81% prefer registered vehicles, while the proportion holding physical assets directly drops slightly from 39% to 36%. “Familiar packaging + clear investor protection” has become a prerequisite; institutions no longer seek “native experience” but prioritize efficiency within compliant wrappers.

Regulation plays a dual role here: 65% increase allocations due to clarity, while 66% worry about uncertainty. Institutions are not demanding a lax environment but need predictable boundaries — this urgent demand for “rule certainty” is reshaping industry competitive dynamics.

Market Outlook: Allocation Behavior and Price Expectations

Direct holdings decrease, while regulated tools rise. Holdings in spot crypto ETFs/ETPs increase from 64% in 2025 to 66%, while direct holdings drop from 39% to 36%. More notable are changes in complex strategies: crypto lending plunges from 20% to 9%, while staking remains stable. Institutions are divesting high-yield, high-risk active strategies and returning to basic beta exposure.

Price expectations remain high but slightly retreat from 2025. 74% expect crypto prices to rise over the next 12 months (vs. 79% in 2025), 23% expect sideways movement, and 4% foresee declines. This minor adjustment reflects rational correction after volatility rather than shaken conviction.

Crypto’s position as one of the “top three opportunities” is solidified. 58% rank crypto among the most attractive risk-adjusted return opportunities over the next three years (second only to private equity at 65%), down 10 percentage points from 2025 but still in second place.

Regulatory Environment: Clarity Needs and Policy Impact

Market structure regulation becomes the most urgent need. 78% of institutions cite “crypto market structure” as the area most requiring regulatory clarity, far exceeding digital asset company licensing (56%), tax treatment (54%), and tokenized securities rules (49%). This ranking reveals underlying institutional anxieties: without clear market structure rules, large-scale allocations are difficult to implement.

The GENIUS Act reshapes stablecoin expectations. 83% believe the act will boost financial institutions’ willingness to participate in stablecoins, and 69% expect corporations/non-financial institutions to adopt stablecoins at scale for payments. Regulatory certainty is transforming stablecoins from “crypto-native tools” into “mainstream financial infrastructure.”

Meanwhile, overlapping concerns and drivers are evident. 66% cite “regulatory uncertainty” as a primary worry, nearly matching the 65% citing “regulatory clarity” as a driver for increased allocations. This seemingly paradoxical situation reflects institutions’ anxiety over rule implementation progress — they are ready to increase exposure but need clear compliance boundaries.

Allocation Perspective: When “Increasing Allocations” Meets “Stricter Discipline”

In 2026, allocation decisions show both scale differentiation and mature logic. 68% plan to increase allocations, but mega-institutions (64%) are noticeably more cautious than small/mid-sized ones (77%) — with assets under management (AUM) reaching trillions, “fear of mistakes” outweighs “fear of missing out.”

The order of drivers for increased allocations is highly indicative: regulatory clarity and confidence in compliance frameworks (65%), expanded availability of regulated vehicles (51%), institutional infrastructure improvements (46%) — with risk-adjusted return improvements (26%) ranking fourth. Institutional logic is replacing alpha chasing.

Two signals stand out in position structure: the proportion of institutions with allocations exceeding 5% of AUM will rise from 18% to 29%, marking a psychological shift from “testing waters” to “heavy positioning”; the share of alternative tokens increases from 51% to 56%, with Solana, Chainlink, and Ripple gaining, but Bitcoin (91%) and Ethereum (90%) maintaining their dominant positions.

In response to the intense volatility of Q4 2025, institutional reactions contrast sharply with retail investors: 49% strengthen risk management, 22% slow down, and only 8% see volatility as an opportunity. Rebuilding discipline takes priority over opportunity capture — a sign of institutional maturity.

Infrastructure and Partnerships: The “Compliance Premium” Revolution in Custody Choices

The dramatic change in custody selection criteria is the most significant institutional signal for 2026. Regulatory compliance jumps from 25% to 66%, security protocols from 8% to 66%, both tied for first; costs/fees plummet from 49% to 7%. “Trusted operations” replace “cost-effective operations” as the priority, with institutions willing to pay a significant premium for compliance.

61% adopt multi-custodian models, reaching 69% among mega-institutions. This is not about technical redundancy but about dispersing counterparty risk — under regulatory uncertainty, no single custodian is viewed as entirely safe.

Capability-building paths are similarly pragmatic: 68% choose to collaborate with crypto-native firms, 69% invest in training/education. Smaller institutions are especially proactive (training 92%, partnerships 85%), reflecting resource-constrained embedded strategies: leveraging external expertise to integrate crypto capabilities into existing organizational frameworks rather than rebuilding internally.

Stablecoins, DeFi, and Tokenization: From “Frontend Functionality” to “Backend Infrastructure”

Stablecoins are undergoing a shift in identity. 86% of institutions have used or intend to use them, but core use cases have shifted from “trading convenience” (85%) to “internal cash management and fund transfers” (85%) and “T+0 securities settlement” (88%). USDC, with an 86% holding rate, surpasses USDT (68%) as the preferred stablecoin among institutions, with US institutions holding 94% — regulatory expectations are reshaping stablecoin competition, with the GENIUS Act’s catalytic effect clearly visible.

Interest and barriers coexist in DeFi participation. 13% are already involved directly, 43% plan to participate within two years, but security (85%), regulatory uncertainty (84%), and compliance risks (81%) form a triple barrier. Institutions are interested mainly in lending (71%) and derivatives (61%), rather than “decentralization” itself — they need permissionless liquidity, not permissionless protocols.

Tokenized assets are the most strategically significant incremental segment within the RWA (real-world assets) track. 63% are “very interested” (up 6 points from 2025), driven by a shift from “portfolio diversification” to “faster trading/instant settlement” (66%). Notably, interest in asset types varies: tokenized money market funds (50%, +26%), corporate bonds (49%, +22%), government bonds (44%, +19%) are surging, while tokenized stocks (20%, -22%) and commodities (18%, -26%) cool down significantly. Institutions prioritize on-chain “cash-like” and “fixed income-like” tools over high-risk equity assets — reflecting risk-averse capital’s filtering logic for RWA.

Pre-IPO equity tokenization presents a differentiated opportunity window. 69% show strong or moderate interest, but with clear segmentation: 37% of asset managers are highly interested, while other types are only 8%. This gap suggests that private market liquidity needs may be among the earliest use cases for tokenization, limited to intermediaries with sufficient resources and capabilities.

The scale-up barriers for tokenization also reveal a “regulatory-integration” dual constraint: regulatory uncertainty (67%) and integration challenges (59%) are the top two. Regulation is both the biggest driver and obstacle — this tension indicates that 2026–2027 will be a critical window for rule implementation, with first movers gaining advantages but facing compliance risks.

Key Themes for 2026

The evolution of institutional digital asset participation in 2026 can be summarized into three mutually reinforcing trends:

First, institutional infrastructure replaces experimental allocations. 73% plan to increase allocations, but 49% strengthen risk management due to volatility, 66% prioritize regulatory compliance in custody, and 81% prefer regulated vehicles — “larger exposure” must go hand-in-hand with “stricter governance.” Crypto is shifting from an “alternative asset” to an “institutional allocation category.”

Second, stablecoins and tokenization serve as bridges connecting traditional finance with on-chain markets. Both are moving from “trading tools” to “settlement and treasury infrastructure,” enabling traditional platforms to gain on-chain efficiency without changing front-end experiences. Crypto is moving from “front-end applications” to “back-end infrastructure.”

Finally, regulatory clarity determines scale-up progress, not direction. 65% increase allocations due to clarity, 66% worry about uncertainty — the direction is clear; progress depends on rule implementation. The GENIUS Act and MiCA will be the most important policy variables to watch in 2026.

In short, the institutional crypto market in 2026 is undergoing a threefold transformation: from “risk appetite-driven” to “risk management-driven,” from “direct crypto exposure” to “infrastructure integration,” and from “regulatory arbitrage” to “compliant operations.” Volatility has not driven institutions away but has filtered out more resilient participants — those capable of embedding crypto into existing governance, operational, and compliance frameworks will lead in the next phase of scaling.