Institutional adoption of digital assets — such as Bitcoin — is booming, with average portfolio exposure expected to double from 7% to 16% within three years, according to new research from State Street.
The State Street study looked at how tokenization and blockchain technology are moving from pilot to implementation across global investment portfolios.
the study Surveyed Top asset management executives are trying to understand how institutions can integrate digital assets, tokenization, and emerging technologies such as artificial intelligence and quantum computing into their strategies.
Nearly 60% of respondents plan to increase allocations to digital assets over the next year, while most expect exposure to double by 2028.
“Institutional investors are moving beyond experimentation – digital assets are now a strategic tool for growth, efficiency and innovation,” said Jörg Ambrosius, Head of Investment Services at State Street.
Coding is driving this transformation
The first wave of tokenization is expected to occur in private equity and private fixed income, areas that have historically been illiquid and opaque.
The survey found that by 2030, more than half of institutions expect between 10% and 24% of total investments to be made through tokenized instruments.
Tokenization – the process of issuing blockchain-based representations of real-world assets – allows for partial ownership, faster settlement, and improved transparency.
State Street research shows that 52% of respondents view token transparency as the highest benefit, followed by faster trading (39%) and lower compliance costs (32%).
Nearly half believe these efficiencies could translate into cost savings exceeding 40%.
Dedicated coding teams are starting to emerge
As adoption deepens, digital assets are being integrated into business processes.
Four in ten organizations now have dedicated digital asset units, and nearly a third have integrated blockchain operations into their overall digital transformation strategy. Another 20% said they planned to follow suit.
Donna Milrod, State Street’s chief product officer, said clients are “reframing their operating models around digital assets,” pointing to projects that include tokenized bonds, stocks, stablecoins and central bank digital currencies.
Cryptocurrencies are still generating returns
Despite growing institutional interest in tokenized assets, cryptocurrencies remain the main driver of digital asset returns.
About 27% of respondents said that Bitcoin is currently generating the highest returns in their digital portfolios, with 25% expecting it to remain a high performer over the next three years.
Stablecoins and tokenized real assets represent the bulk of institutional digital holdings, but traditional cryptocurrencies still dominate the earnings picture.
State Street warned that although digital assets have become mainstream, institutions are cautious about the pace of change.
Only 1% of respondents believe that most investments will be through tokenized assets by 2030, but the majority expect steady progress as infrastructure and regulation mature.
“Institutional trust in digital assets is no longer theoretical,” Ambrosius said. “It’s a process.”
The post Institutions Plan To Double Bitcoin And Crypto Exposure By 2028, State Street Research Finds first appeared on Investorempires.com.
