Institutional Investors Reignite Interest in Digital Assets as Crypto Sentiment Stabilizes

Sentiment around digital assets is rebounding among some of the world’s largest institutional investors, according to Ron Biscardi, CEO of iConnections, a global capital introduction platform representing more than $55 trillion in assets. After the sharp downturn triggered by the FTX collapse in 2022, crypto markets endured a prolonged cooling-off period. Now, data from thousands of meetings between fund managers and allocators suggests institutional crypto interest is returning to more normalized levels.

At this year’s iConnections conference, more than 75 digital asset funds participated, generating roughly 750 meetings with limited partners (LPs)—a figure comparable to 2022, when crypto enthusiasm was near its peak. Nearly 25% of LPs on the platform now express interest in digital asset strategies, signaling that crypto is increasingly viewed as a standard allocation within alternative investments rather than a speculative niche.

Family offices remain the most active cohort exploring crypto exposure, particularly in financial hubs such as Dubai, Switzerland and Singapore. Wealth managers are facing growing client demand for bitcoin and broader digital asset exposure, even amid market volatility. Bitcoin is down about 25% year-to-date, and major crypto-related stocks like Coinbase and MicroStrategy have underperformed many technology peers.

Despite this, institutional investors are approaching the asset class cautiously. Regulatory clarity remains the primary hurdle for chief investment officers and fiduciaries responsible for client capital. Many prefer regulated vehicles such as bitcoin and ether ETFs over direct token purchases, relying on experienced fund managers to select specific assets.

While bitcoin is often discussed as digital gold, allocators still treat it as a risk asset due to its correlation with equities during market stress. However, the tone of the debate has evolved significantly. Concerns about crypto’s legitimacy have largely faded, and even conservative investors, including endowments, are beginning to add measured exposure. With regulatory frameworks gradually improving, digital asset managers may be nearing full institutional legitimacy.