Bitwise released a new report this week that gives us something institutional investors do not often share with the public: A detailed look at how they think about crypto.
The finished report, Institutional Crypto Adoption, draws on 15 interviews conducted in late March through April 2026 with investment professionals. People responsible for crypto allocation decisions at endowments, foundations, public pensions, sovereign wealth funds, multi-family offices and so on. Organizations ranged from hundreds of millions to tens of billions of dollars in assets under management.
That makes the findings interesting—but not representative of institutional investors as a whole. Fifteen interviews are a small sample, and Bitwise is itself a crypto asset manager. The report was also released in September even though the interviews took place months earlier, with most market figures current through April 30.
Still, the interviews offer a rare window into how a group of large, crypto-engaged investors makes decisions. And one finding in particular stands out.
A 50% drop did not trigger a rush for the exits
According to Bitwise, crypto markets fell roughly 50% between October 2025 and April 2026. None of the institutions interviewed reduced its crypto allocation during that period, while several bought more.
That sounds like classic “HODL” behavior. But the report actually describes something more deliberate.
When asked what would cause them investors to sell, nobody named a price decline alone. Instead, they pointed to changes that would challenge the reason they owned an asset in the first place. Like failure of a technology project. A major regulatory change. An industry-wide credibility crisis.
The big lesson isn’t that these investors were willing to tolerate losses. That they’d already thought through what would change their minds before volatility tested their conviction.
Think for just a minute about how smart that is. Most people I know invest in an asset because, say, they like the company. They think Apple’s a great company and its new foldable iPhone will be a big hit. What they don’t consider in advance is what would change their minds. What if the $1,999 iPhone Duo doesn’t sell out worldwide? Would that be a failure of their thesis? Would it mean Apple isn’t a great company anymore?
By failing to think through these basic questions, I think it leaves investors overfocused on one thing: Day-to-day price moves. When you don’t have an investment thesis, the way these institutional professionals do, then you don’t really have a definition of success or failure. I think it’s smarter to have a testable hypothesis than it is to simply react to price movements.
But that’s just me – let’s get back to the Bitwise study…
They don’t treat every cryptocurrency the same way
Bitcoin occupied a distinct place in these portfolios.
Every respondent that owned crypto owned bitcoin. For nearly all of them, Bitwise says, bitcoin was their first, largest and longest-held crypto asset. Many described it as a store-of-value investment and some explicitly paired bitcoin and gold as hedges against currency debasement.
To be perfectly clear, that was their investment thesis. That’s not the same as proof that bitcoin does the job, or deserves a place in everyone’s savings. This builds on research we’ve often discussed, from institutions like Morgan Stanley and VanEck – even the Institute of Business and Finance has a take.
Ethereum’s ether and Solana’s SOL received more conditional consideration. Institutions that owned them generally held smaller positions, on shorter time horizons. Some had explicit exit conditions tied to real-world adoption and whether greater network use ultimately creates value for the underlying token.
Several respondents told Bitwise they intended to sell those positions if meaningful adoption failed to materialize over the next few years.
That distinction matters. “Institutional investors are holding crypto” is true here, but I think it leaves out the more useful part of the story. Institutions don’t treat different cryptocurrencies the same. They held different assets for different reasons – and had different goals for them, too.
That’s smart – because there are different types of digital currency. Stablecoins for payment, bitcoin as an inflation hedge, utility tokens like ether and SOL for their role in blockchain technology, DeFi-related cryptos like Aave and Uniswap… They’re all crypto, but they do different things. This is one way diversification within cryptocurrency can be beneficial.
What else can we learn from these professional investors?
Position size matters
Crypto allocations ranged broadly from 0.5%-13% of investable assets – but most landed between 1%-2%.
That’s an extremely wide spread! The majority, though, fell within the range most often recommended to everyday investors who decide that crypto is an appropriate asset for themselves. An allocation of half a percent might not move the needle much, even over a couple of decades… While a 13% allocation to a volatile asset like crypto just seems to be asking for trouble.
Here’s the difference, in my mind: Each institution had to decide how much crypto exposure fit their goals. How much volatility they were willing to accept. And then, which crypto assets fit those roles.
Interestingly, almost every institution used spot crypto ETFs. Why? Lower all-in costs, lower operational burden and the familiarity of handling an ETF within existing back-office systems. Really, because ETFs are familiar to investing professionals. They didn’t need to get a bunch of approvals from their IT departments and their boards of directors.
Now, I’m not a huge fan of crypto ETFs generally, but there is an important point here. By taking crypto and putting it into a familiar wrapper, ETFs offer an asset fits right into the systems, policies and approval processes those institutions already use.
Yes, individuals like you and I are more flexible (we really do have some advantages the big guns don’t…)
The roadblocks holding some institutions back
The recurring obstacles among interviewees were often governance, reputation and classification. In other words, they hadn’t decided that crypto lacked investment merit – but for other reasons, they couldn’t get exposure to crypto.
Some respondents struggled with where crypto belonged inside an existing portfolio framework. To me, that’s the saddest part of this story. It’s like deciding not to buy a new pair of shoes you really want because you can’t decide where to put them in your closet.
Others faced investment committees, boards, public scrutiny or “headline risk.” The report also found that institutions with more layers of approval generally tended to make smaller allocations.
Personally, I’ve found that to be the case in most organizations. The more people who are involved in any decision, the more conservative those decisions become.
That’s not terribly surprising, I suppose. After all, institutional investors are managing other people’s money by definition. Their clients probably don’t want them making innovative decisions or testing new ideas.
Even so, the report tells us one thing. For some large investors, the conversation has finally moved beyond “What is crypto?” to more meaningful questions:
- Which cryptocurrencies?
- What percentage of overall assets?
- What percentage per cryptocurrency?
- Using what financial product?
- Under what conditions would the thesis change?
I’m taking the time to make that list because those are important questions – they sort we all need to answer before we make investment decisions.
What’s the takeaway for individual investors?
Probably not “copy the institutions.”
A pension fund, sovereign wealth fund or endowment has a different mandate, time horizon, liquidity profile, governance structure and tolerance for volatility than someone planning for retirement. Following someone else’s example, without understanding the logic behind it, is a recipe for disappointment…
No – instead, the big lesson here is this:
Have a framework before making a decision.
That can mean asking what role an asset is supposed to play, how much volatility you can tolerate, what time horizon you are working with, how the investment fits alongside the rest of your retirement savings.
And, maybe most importantly, what would have to change before you revised your thesis.
Those questions matter regardless of the asset itself. Cryptocurrency, collectible coins, catastrophe bonds – you can evaluate any asset using the same framework.
And you probably should!
Where a Digital IRA fits
For investors who decide that supported digital assets fit their long-term retirement strategy, a self-directed Digital IRA is the only way I know of to directly own crypto in your retirement savings.
BitIRA helps eligible customers establish and maintain self-directed retirement accounts that can hold a selection of supported cryptocurrencies. The tax treatment depends on the type of IRA. Traditional and Roth IRAs follow different contribution, deduction and withdrawal rules, so the account structure matters a great deal. Remember, you can’t control asset prices, but you can control the tax treatment of your retirement savings.
BitIRA also works with specialized custody and security arrangements designed specifically for digital assets. That doesn’t remove crypto’s volatility risk – but it does provide a retirement-account structure for Americans who want to diversify their financial futures with the future of money itself.
If you want to learn more about the benefits of diversifying your savings with cryptocurrency, request your free Crypto IRA Guide here. If you’ve already completed your due diligence and want to get started, you can open a Digital IRA with BitIRA online right now – it only takes about seven minutes.
But first, remember – first make your framework, then pick your assets.
