Key Takeaways
- • A March EY-Parthenon and Coinbase report found three quarters of surveyed institutional investors plan to increase digital asset allocations in 2026, with 29 percent of those planning allocations above 5 percent of portfolios.
- • Eighty-one percent of respondents preferred registered funds over direct investment, up from 60 percent a year earlier, and 66 percent plan to invest through exchange-traded products.
- • EY-Parthenon's Prashant Kher attributes 2025 activity largely to the executive orders and the GENIUS Act, with the focus now shifting to market structure, tax treatment and licensing clarity.
- • Recent bitcoin price volatility has reinforced a more disciplined, risk-managed approach, with institutions demanding clearer liquidity expectations and operational resilience.
- • The proposed Digital Asset Market Clarity (CLARITY) Act of 2025 is expected to advance through Congress in the coming weeks or months, though it could slip to early 2027 according to other coverage.
Summary
Regulatory changes are prompting institutional investors to increase exposure to digital assets, but they are proceeding cautiously and favoring packaged products over direct holdings, according to Institutional Investor. A March report from EY-Parthenon and Coinbase found that three quarters of surveyed investors plan to raise digital asset allocations this year, and 29 percent of those intend to hold more than 5 percent of their portfolios in the asset class.
The preference for intermediated access is pronounced. Overall, 81 percent of respondents preferred registered funds over investing directly, up from 60 percent a year earlier, while 66 percent plan to invest through exchange-traded products.
Prashant Kher, digital assets strategy and transactions leader at EY-Parthenon, said increased investment activity in 2025 was largely spurred by the executive orders and the GENIUS Act. He said the focus has moved toward clarity on market structure, tax treatment and the licensing of digital asset companies. Recent price volatility in assets such as bitcoin has reinforced a disciplined approach. Investors continue to seek the innovation and diversification potential of digital assets, including stablecoins and tokenization, but also want regulatory guardrails around risk management and governance. Institutions are also demanding clearer liquidity expectations and operational resilience. Kher described a shift from "why should we do this" to "how should we do this."
The change follows a marked shift in the U.S. regulatory environment after Donald Trump's election in 2024. The appointment of Paul Atkins to lead the Securities and Exchange Commission signaled a more permissive, enforcement-lite approach to digital assets. The GENIUS Act, signed into law in July 2025, established a federal regulatory framework for stablecoins.
Industry participants hope the Digital Asset Market Clarity Act of 2025 will pass Congress in the coming weeks or months. As proposed, the CLARITY Act would establish a regulatory framework for cryptocurrencies and move toward treating digital commodities as securities. Separate publisher context indicates passage may slip to early 2027, though adoption is proceeding regardless, given supportive SEC and CFTC postures.
The preference for intermediated access is pronounced. Overall, 81 percent of respondents preferred registered funds over investing directly, up from 60 percent a year earlier, while 66 percent plan to invest through exchange-traded products.
Prashant Kher, digital assets strategy and transactions leader at EY-Parthenon, said increased investment activity in 2025 was largely spurred by the executive orders and the GENIUS Act. He said the focus has moved toward clarity on market structure, tax treatment and the licensing of digital asset companies. Recent price volatility in assets such as bitcoin has reinforced a disciplined approach. Investors continue to seek the innovation and diversification potential of digital assets, including stablecoins and tokenization, but also want regulatory guardrails around risk management and governance. Institutions are also demanding clearer liquidity expectations and operational resilience. Kher described a shift from "why should we do this" to "how should we do this."
The change follows a marked shift in the U.S. regulatory environment after Donald Trump's election in 2024. The appointment of Paul Atkins to lead the Securities and Exchange Commission signaled a more permissive, enforcement-lite approach to digital assets. The GENIUS Act, signed into law in July 2025, established a federal regulatory framework for stablecoins.
Industry participants hope the Digital Asset Market Clarity Act of 2025 will pass Congress in the coming weeks or months. As proposed, the CLARITY Act would establish a regulatory framework for cryptocurrencies and move toward treating digital commodities as securities. Separate publisher context indicates passage may slip to early 2027, though adoption is proceeding regardless, given supportive SEC and CFTC postures.
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