Regulatory changes are prompting institutional investors to increase exposure to digital assets — but they’re being cautious and investing through products rather than going direct.
A March report from EY-Parthenon and Coinbase shows that three quarters of surveyed investors plan to increase digital asset allocations this year, with 29 percent of those planning for that allocation to comprise more than a 5 percent share of their portfolio.
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.
“Increased investment and the levels of activity in 2025 was largely spurred by the executive orders and the GENIUS Act,” said Prashant Kher, digital assets strategy and transactions leader at EY-Parthenon. “What people are looking towards now is more clarity around market structure, tax treatment and the licensing of digital asset companies.”
Recent price volatility of assets such as bitcoin has reinforced a more disciplined approach, said Kher. Investors continue to seek the potential innovation and diversification of digital assets, including stable coins and tokenization, but they also want regulatory guardrails around risk management and governance.
Institutions are also increasingly demanding clearer liquidity expectations and operational resilience from their digital asset exposure.
“What is peaking investor interest now is the regulatory support behind the technology,” added Kher. “Digital assets have become one of the top topics we talk to clients about, alongside AI. There has been a shift from ‘why should we do this’ to ‘how should we do this’.”
The shift follows a marked change in the U.S. regulatory environment after the election of Donald Trump in 2024. The appointment of Paul Atkins to lead the Securities and Exchange Commission heralded a more permissive, enforcement-lite approach to digital assets.
A key change was the GENIUS Act. Signed into law in July 2025, this established a clear federal regulatory framework for stablecoins.
And there is hope within the industry that the Digital Asset Market Clarity Act of 2025 will make its way through Congress in the coming weeks or months. As proposed, the Clarity Act will establish a concrete regulatory framework for cryptocurrencies and pave the way towards establishing digital commodities as securities.
