The evolving landscape of institutional investing reflects a growing acceptance and integration of digital assets. A recent survey by State Street, a key player in the asset management sector, indicates that financial institutions anticipate more than a doubling of their exposure to digital assets—rising from an average of 7 percent today to a projected 16 percent by 2028.
Transformational Shift in Investment Strategies
Initially seen as experimental, blockchain technology and tokenization have now become integral to investment strategies. In discussions with hundreds of senior executives in the financial industry, State Street found that nearly 60 percent have plans to intensify their investment in cryptocurrencies and tokenized assets within the next year.
Joerg Ambrosius, president of Investment Services at State Street, emphasized this trend, stating that digital assets are evolving from mere pilot projects to becoming fundamental drivers of growth, operational efficiency, and innovation in financial markets.
The Advantages of Tokenization
A notable focus of the research was the emergence of tokenization, which involves converting conventional assets, such as real estate or corporate bonds, into digital tokens on the blockchain. This transformation not only accelerates trading but also enhances transparency and access.
According to the findings, over half of the respondents expect that by 2030, between 10 and 24 percent of their investments will flow through tokenized instruments. The private equity sector and fixed-income markets, which historically lacked liquidity and transparency, stand to gain considerably from this revolution.
Respondents highlighted transparency as the primary benefit of tokenization, with 39 percent citing faster trading and 32 percent noting reduced costs. Some financial institutions even predict that these efficiencies could result in savings exceeding 40 percent.
Cryptocurrency’s Continued Relevance
Despite the rise of tokenization, cryptocurrency, particularly Bitcoin, remains a vital source of returns for institutional investors. Currently, 27 percent of the respondents acknowledge that Bitcoin yields the highest returns, and 25 percent expect this trend to continue in the near future.
Moreover, interest in stablecoins and tokenized real-world assets (RWAs) is also growing, as they provide a more stable foundation for institutional investment.
Accessibility Through Morgan Stanley
As the crypto landscape evolves, traditional banks are adapting their offerings. Notably, Morgan Stanley, which manages over $8.2 trillion in client assets, is set to open crypto investments to a broader client base starting October 15, 2025. This change allows regular customers, including those with retirement accounts, to invest in cryptocurrencies, an opportunity previously limited to high-net-worth individuals.
However, the bank is adopting a cautious approach, implementing an automatic control system to prevent clients from allocating excessive funds to cryptocurrencies. Chief Investment Officer Lisa Shalett recommends a maximum initial allocation of 4 percent, based on the individual’s risk profile.
The Maturation of the Crypto Market
The insights from State Street alongside Morgan Stanley’s policy adjustments paint a clear picture: cryptocurrencies have transitioned from a niche interest to a significant element of modern investment strategies. Financial institutions are not merely following trends; they are proactively shaping the market with tokenized bonds, stablecoins, and regulated Bitcoin funds. This emergence signals a new era where digital assets will occupy a permanent space in financial portfolios.
