According to a survey of 97 Coinbase and Ey-Parthenon institutions, EU and UK institutional investors have significantly increased their cryptocurrency allocations, with 86% planning to increase their holdings or enter the market in 2025.
Defi Engagement set to jump 2.5 times in European institutions
Half of respondents plan to allocate managed assets (AUM) to digital assets, starting from 46% in 2024, indicating a growing commitment despite volatility concerns.
Regulation clarity emerged as the biggest catalyst for growth (58%), with licensing frameworks, custody rules and tax treatment being cited as important needs. Volatility (51%) and market manipulation risk (42%) remain important concerns, but 71% of institutions already hold Altcoin beyond Bitcoin and Ethereum.
“Regulation clarity was cited as the biggest concern for digital asset managers. Respondents said that increasing clarity in regulations is the biggest catalyst for moving the industry forward,” says the Coinbase and Ey-Parthenon Report.
The study author added:
“European asset managers are focused on hoping for consumer recruitment and increasing knowledge of digital assets that support recruitment.”
Priority investment routes include registered vehicles such as Exchange-Traded products (ETP), supported by 57% of respondents. Tokenization attracted strong interest, with 58% being “very interested” in assets such as tokenized products (56%) and real estate (42%). Almost 70% of these investors plan their allocations by 2026, primarily due to portfolio diversification.
Defi Engagement is projected to surge from 2.5 times to 68% within two years, but 66% of non-participants cited knowledge gaps as a barrier. Stablecoins looks at robust utilities, with 81% of institutions using or exploring foreign exchange (75%) and trading efficiency (67%).
Despite optimism, the Coinbase and Ey-Parthenon report said 66% flagged an internal expertise shortage as a hurdle to Defi’s adoption, while 62% emphasized regulatory compliance risks. The findings point to a mature European market where rising quotas are consistent with a clearer framework and education demands.
Coinbase and Ey-Parthenon conducted a global survey in January 2025, with European data reflecting institutions managing more than $1 billion in assets.
