Institutional Investors Switch from Speculation to Diversification: Sygnum

Institutional crypto investors are changing their approach to digital assets, with diversification replacing speculation as the leading investment thesis, according to Sygnum’s Future Finance 2025 global institutional investor report.

The Swiss digital asset bank found that more than 60% of institutional crypto investors plan to increase their crypto allocations, while only 4% plan to reduce exposure. However, bullish sentiment remains dependent on the market catalysts expected in the final quarter of the year. The report, based on a late-third quarter survey of more than 1,000 institutional and professional investors in 43 countries, also found that portfolio diversification (57%) had overtaken short-term return potential (53%) for the first time as the top reason for investing in digital assets.

“We interpret the findings as evidence that crypto assets are emerging as a long-term strategic asset class, with unique value drivers and risk factors,” said Fabian Dori, Chief Investment Officer at Sygnum. Declutter.

Sygnum’s findings come at a time of uncertainty in the fourth quarter markets, as investors weigh expected ETF approvals, the impact of upcoming US market structure laws and global fiscal instability. Liquidations in late October and delayed catalysts have dampened earlier optimism, with many investors now taking a wait-and-see approach.

Lucas Schweiger, Sygnum’s lead crypto ecosystem research and author of the report, noted that the 2025 story is defined by “measured risk, pending regulatory decisions and strong demand catalysts against a backdrop of fiscal and geopolitical pressures.”

A mature crypto market

The report paints a picture of a maturing market where passive exposure is being replaced by discretionary mandates and actively managed strategies. Investors Diversify Across Tokenized Money Market Funds, stable coinsand multi-asset exchange traded products (ETPs), indicating a preference for balanced, flexible exposure. More than 70% of respondents said they would increase allocations if staking for ETFs were approved, a sign of the sector’s increasing sophistication.

The report suggested growing acceptance of crypto in the traditional financial world. More than 80% of respondents said this Bitcoin is a viable treasury reserve, and 70% believed that holding cash over Bitcoin has a high opportunity cost over the next five years.

But regulatory uncertainty and safety concerns remain major obstacles. While volatility has historically been cited as the main deterrent, this year’s respondents rated unclear legislation and custody risks higher. Sygnum’s analysts suggest that jurisdictions with established regulatory clarity, such as Switzerland and parts of Europe following MiCA, are already benefiting from increased institutional confidence, while APAC markets are lagging due to tightening restrictions.

“Regulatory concerns are more visible among APAC investors, where regulation is facing both progress and setbacks, with regulators tightening restrictions that could limit exposure to the asset class,” Dori said. He added that he expects the situation to “improve dramatically over the course of the year,” with record high inflows and an “impressive list of TradFi institutions now entering the space,” following the passage of the GENIUS Act in the US.

Among high-net-worth individuals (HNWIs), 91% say crypto plays a key role in preserving long-term wealth against the depreciation of fiat currency. Interest in crypto ETFs further Bitcoin And Ethereum also rose dramatically, with 70% of respondents open to more allocations if striking were allowed.

As fiat currencies come under increasing scrutiny and trust in traditional systems erodes, the report also notes that high-net-worth individuals are increasingly looking to Bitcoin’s scarcity and decentralization as a hedge against macroeconomic instability. As Western budget pressures increase, digital assets are becoming less about speculation and more about preservation.

“The trend is strongly linked to the dollar, but also to the poor performance of the EUR,” Dori said. High net worth individuals are “primarily focused on their long-term investment horizon,” meaning volatility is less of an issue; “Especially when you consider that the volatility of Bitcoin has structurally decreased over the years.” He added that Bitcoin “continues to outperform as dollar purchasing power declines.”