The adoption of digital assets, such as bitcoin, by institutions is witnessing significant growth, with the average portfolio exposure projected to increase from 7% to 16% over the next three years, as per new findings from State Street.
State Street’s research highlighted the transition of tokenization and blockchain technology from trial phases to practical implementation within global investment portfolios.
The study investigated senior executives in asset management to understand how organizations are incorporating digital assets, tokenization, and cutting-edge technologies like AI and quantum computing into their frameworks.
Almost 60% of the surveyed participants intend to boost their digital asset allocations in the upcoming year, with the majority forecasting a twofold increase by 2028.
“Institutional investors are progressing beyond mere experimentation — digital assets have become a pivotal strategy for growth, efficiency, and innovation,” noted Joerg Ambrosius, president of Investment Services at State Street.
Tokenization is driving the transformation
The initial phase of tokenization is anticipated to take place in private equity and private fixed income, sectors that have traditionally been characterized by illiquidity and lack of transparency.
According to the survey, by 2030, over half of the institutions expect between 10% and 24% of their total investments to be processed through tokenized instruments.
Tokenization — the process of creating blockchain-based representations of real assets — facilitates fractional ownership, expedited settlement, and enhanced transparency.
State Street’s findings reveal that 52% of respondents consider the transparency of tokenization as the greatest advantage, followed by quicker trading (39%) and reduced compliance costs (32%).
Nearly half believe these efficiency gains could lead to cost savings exceeding 40%.
Emergence of dedicated crypto teams
As adoption accelerates, digital assets are being woven into business operations.
Forty percent of institutions now possess specialized digital asset teams, and nearly one-third have integrated blockchain capabilities into their broader digital transformation initiatives. An additional 20% plan to do the same.
Donna Milrod, State Street’s chief product officer, highlighted that clients are “restructuring their operational frameworks around digital assets,” citing projects that involve tokenized bonds, equities, stablecoins, and central bank digital currencies.
Crypto continues to yield returns
Even with the rising institutional focus on tokenized assets, crypto remains the leading contributor to digital asset returns.
While stablecoins and tokenized real-world assets make up a significant share of institutional digital holdings, traditional cryptocurrencies continue to prevail in profitability.
State Street cautioned that while digital assets are on the path to becoming mainstream, institutions are careful regarding the speed of change.
Only 1% of respondents assert that most investments will occur through tokenized assets by 2030, yet the majority anticipate gradual progress as infrastructure and regulations evolve.
“Institutional confidence in digital assets is no longer a theoretical concept,” Ambrosius remarked. “It’s now a matter of operations.”
