Sygnum: 61% of institutions plan to increase crypto holdings in Q4, as ETF and tokenization narratives rise

According to the “Future Finance 2025” report released by Sygnum Bank on November 11, 2023, 61% of institutional investors plan to increase their digital asset allocations in Q4, with 38% explicitly stating they will execute additional purchases this quarter. A key shift in investment themes has occurred—diversification has replaced the “Mega Trend narrative” as the primary allocation logic, indicating that cryptocurrencies are transitioning from speculative tools to mature portfolio components.

However, this optimism has its limits: most investors have turned neutral or cautious about the outlook for 2026, expecting that plateauing interest rates and weakening macro tailwinds will slow growth. Among high-net-worth investors, 91% still view cryptocurrencies as a long-term wealth preservation tool, but tactical allocations are becoming more rational.

Evolution of Institutional Behavior: From Tentative Engagement to Strategic Allocation

Sygnum’s survey of over 1,000 professional and high-net-worth investors across 43 countries shows a qualitative change in how institutions participate in the crypto market. Active management strategies now account for 42%, surpassing single-token bets (39%) for the first time, reflecting a preference for flexible approaches that can adapt to regulatory changes and market volatility. This shift is driven by three factors: clearer regulation boosting compliance confidence, mature custody infrastructure reducing operational risks, and tokenization technology creating new revenue streams. Institutions are no longer asking “Should we allocate?” but “How can we optimize our allocations?”

Notably, the structural increase in allocation sizes is evident: family offices allocate an average of 4.2% of their portfolios to digital assets, up 1.8 percentage points from 2023; hedge funds’ related exposure reaches 6.7%. While moderate, this growth is significant—it indicates that cryptocurrencies are being incorporated into mainstream asset allocation models based on Sharpe ratios and correlation tests. Lucas Schweiger, an analyst at Sygnum Bank, states, “Institutions no longer see cryptocurrencies as a defensive tool but as a necessary part of participating in the evolution of the global financial structure.” This cognitive shift has more profound implications than short-term price fluctuations.

ETF Expansion and the Rise of Tokenization

Demand for ETFs beyond Bitcoin and Ethereum spot products is exploding, with 81% of respondents seeking broader ETF exposure, and 70% indicating they would increase allocations if staking features are supported. This demand is exemplified by the Solana ETF—US spot SOL ETFs saw over $200 million in net inflows in their first week of listing, with continuous inflows for 10 days. Multi-asset crypto ETFs (containing 5-10 major tokens) are also highly anticipated, especially versions offering automatic compounding.

Tokenization is another major highlight: investor interest in tokenized real-world assets (RWA) has surged from 6% in 2023 to 26%. This growth is driven by three types of products: tokenized government bonds (e.g., US Treasury tokens), private equity fund shares (e.g., real estate funds), and commodity tokens (e.g., gold tokens). Institutions particularly value these products for their 24/7 trading capabilities, improved liquidity, and programmable compliance. The RWA market is projected to grow from $45 billion today to $200 billion by 2026.

Key Data on Institutional Allocation Preferences

Investment Intentions

• Planned increase: 61% (overall), 38% in Q4
• Active strategies: 42%
• Index exposure: 39%
• Single-token bets: 19%

Product Preferences

• Broader ETF access: 81%
• Staking ETF demand: 70%
• RWA interest: 26% (up from 6% last year)
• Holding cash vs. opportunity cost of Bitcoin: 70% believe holding cash incurs high costs

Outlook for 2026: From Euphoria to Rational Cycle Management

Despite short-term optimism, expectations for 2026 have cooled significantly. This cautious outlook is based on three assessments: first, the Federal Reserve’s rate-cutting cycle is expected to peak in early 2026, reducing liquidity support; second, regulatory uncertainty may rise again following US elections; third, current valuations already reflect most known positives. Sygnum defines 2025 as a “year balancing risk and strong demand catalysts,” while 2026 will require new narratives to drive growth.

Cycle position analysis supports this view: based on Bitcoin halving cycles, 2026 may be in a “post-halving consolidation phase,” with historical data showing average returns during such periods are significantly lower than the 12 months before halving. More importantly, institutional investors themselves are becoming market stabilizers rather than sources of volatility—through rebalancing and risk management, they naturally suppress extreme swings. This does not necessarily mean a bear market but could usher in a “low-volatility upward trend,” similar to mature periods of traditional tech stocks.

Balancing Long-Term Beliefs and Tactical Adjustments

High-net-worth investors remain firmly committed to their long-term beliefs: 91% see cryptocurrencies as key tools for wealth preservation, 81% recognize Bitcoin’s feasibility as a treasury reserve asset, and 70% believe the opportunity cost of holding cash instead of Bitcoin over five years is too high. These beliefs are rooted in structural trends: digital currency transformation, blockchain efficiency improvements, and the fragmentation of global payment systems. However, tactical execution is becoming more refined—62% of institutions adopt a “core-satellite” strategy (core holdings in Bitcoin and Ethereum, supplemented by altcoins), and 45% use derivatives to hedge beta exposure.

Operationally, institutions plan to focus on three areas in Q4: first, compliant DeFi protocols (especially those with real yields); second, blockchain infrastructure (Layer 2 and modular blockchains); and third, tokenization platforms. The average holding period has extended from 8.2 months in 2023 to 13.5 months, indicating a more long-term investment framework. In risk management, 88% now use professional custody solutions, and 76% purchase insurance coverage, reflecting an increased emphasis on operational security.

Conclusion

The Sygnum report depicts a mature landscape of institutional crypto adoption: allocations are becoming routine, strategies are more sophisticated, and expectations are managed more rationally. While cautious outlooks for 2026 may temper short-term enthusiasm, this rationalization is a sign of healthy market development. For individual investors, following institutional focus—diversification, active management, real-world applications—may be key to succeeding in the new cycle. Cryptocurrencies are shifting from thematic trading to value investing, a process that may lack excitement but offers greater sustainability.