Institutional traders are more and more bullish on cryptocurrency, with 83% saying they plan to up crypto allocations in 2025, in line with a March 18 report by Coinbase and EY-Parthenon.
Already, almost three-quarters of companies surveyed stated they maintain cryptocurrencies apart from Bitcoin (BTC) and Ether (ETH), and a “significant majority” stated they plan to spice up crypto allocations to five% or extra of their portfolios, the report said.
They are motivated by the view that “cryptocurrencies represent the best opportunity to generate attractive risk-adjusted returns over the next three years,” in line with the report.
Coinbase, the US’ largest crypto alternate, and EY-Parthenon, a consultancy, based mostly the findings on interviews with greater than 350 institutional traders in January.
Among institutional altcoin holdings, XRP (XRP) and Solana (SOL) are the most well-liked, the survey discovered.
Coinbase and EY-Parthenon surveyed greater than 350 monetary establishments on crypto. Source: Coinbase
Related: Stablecoin adoption, ETFs to propel crypto performance in 2025: Citi
Altcoin ETFs incoming
Altcoin holdings may rise even additional if US regulators approve deliberate exchange-traded fund (ETF) listings this 12 months.
Asset managers are awaiting a greenlight from the US Securities and Exchange Commission to listing greater than a dozen proposed altcoin ETFs.
Litecoin (LTC), SOL and XRP are seen because the almost definitely to see near-term approval, in line with Bloomberg Intelligence.
On March 17, the Chicago Mercantile Exchange (CME) Group, the most important US derivatives alternate by quantity, launched futures contracts tied to SOL, marking a significant step toward institutional adoption of the altcoin.
Stablecoins and DeFi take off
Meanwhile, stablecoins proceed to see institutional uptake, with 84% of respondents both holding stablecoins or exploring doing so, the survey discovered.
According to the report, establishments are utilizing “stablecoins for a variety of use cases beyond just facilitating crypto transactions, including generating yield (73%), foreign exchange (69%), internal cash management (68%), and external payments (63%).”
In December, funding financial institution Citi stated stablecoin adoption will accelerate onchain activity, together with in decentralized finance (DeFi).
The survey discovered that solely 24% of institutional traders at the moment use DeFi platforms, however that determine is anticipated to develop to just about 75% within the subsequent two years.
“Institutions are attracted to DeFi for myriad reasons, citing derivatives, staking, and lending as the use cases they are most interested in, followed closely by access to altcoins, crossborder settlements, and yield farming,” the report stated.
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