Institutional investors largely maintained or increased their cryptocurrency holdings during a roughly 50% market decline that began in October 2025 and extended into early 2026, according to findings from asset manager Bitwise. The firm’s inaugural Institutional Crypto Adoption Report, drawn from interviews with 15 large allocators conducted in late March and April 2026, found that none reduced their crypto exposure amid the sharp price drop.

The participants represented a range of organizations, including university endowments, foundations, public pension funds, sovereign wealth funds, multi-family offices, investment consultants and public companies. Their portfolios spanned hundreds of millions to tens of billions of dollars. Market capitalization for the broader crypto sector fell from a 2025 peak near $4.2 trillion to a low of about $2.06 trillion before recovering to roughly $2.8 trillion.

Allocations Remain Modest but Resilient

Crypto positions among the surveyed institutions ranged from 0.5% to 13% of investable assets, with the majority clustered between 1% and 2%. Breakdowns varied by organization type. Endowments and foundations typically held between 0.5% and 2%, though some reached as high as 10%. Sovereign wealth funds reported 1% to 1.5%, public pensions between 1.5% and 4.5%, multi-family offices as high as 13% with common targets around 5%, and public companies allocated 1% to 10% of excess cash.

Several respondents increased their exposure while prices declined. Price declines alone did not prompt selling. Instead, institutions cited potential exit triggers such as a regulatory reversal, an industry-wide credibility problem or a clear failure of their underlying investment thesis. Some had already navigated earlier drops exceeding 50%, including the 2022 downturn.

Bitcoin Anchors Institutional Portfolios

Every institution that held crypto owned Bitcoin, typically as its first, largest and longest-standing digital asset position. Most framed Bitcoin as a store of value, frequently pairing it with gold as a hedge against fiat currency debasement. One endowment described its Bitcoin holding as an emerging-to-established store-of-value play and a venture-style bet on the asset potentially growing into a $20 trillion market over the next 5 to 15 years.

Ether and Solana appeared in smaller allocations with shorter time horizons and more explicit conditions. Several institutions indicated they could reduce or exit those positions within a few years if growth in stablecoins, decentralized finance or tokenization failed to generate value for the tokens themselves. One institution that held neither asset had used decentralized finance applications extensively yet saw no clear path from that activity to tokenholder benefits.

Spot ETFs Gain Ground as Preferred Vehicle

Nearly all respondents either already used spot crypto exchange-traded funds or planned to do so. Many cited lower total costs, reduced operational requirements and easier integration with existing custody, reporting and rebalancing systems as reasons for shifting from direct holdings or private placements toward ETFs.

A minority took a different path. One sovereign wealth fund was developing domestic custody infrastructure to meet a government mandate for direct control of underlying assets. A public endowment followed a policy prohibiting ownership of any spot commodity, including through ETFs. Another preferred structures that avoided public Form 13F disclosure of positions.

Public filings and flow data present a more mixed picture outside the surveyed group. Professional investors’ reported U.S. spot Bitcoin ETF exposure fell 17% in the first quarter of 2026, according to a CoinShares analysis of 13F data, with hedge funds and brokerages accounting for about 96% of the reduction while banks added holdings. Some large endowments adjusted positions in earlier quarters, though longer-term allocators in certain filings remained steady or increased exposure. Bitwise noted that reported ownership figures understate total institutional activity because many holdings occur through vehicles not captured in standard disclosures.

Governance and Process Shape Future Growth

Internal governance, custody arrangements, portfolio classification and reputational considerations remained the primary constraints on larger allocations, more so than questions about potential returns. Approval processes differed widely: family offices generally faced fewer layers, while public pensions and sovereign funds navigated boards, elected officials, central-bank oversight and public scrutiny. Career and reputational risk factored into decisions at several public-facing institutions.

Bitwise, which manages more than $9 billion in client assets, projects that a majority of institutional investors will hold crypto within five years, driven by regulatory developments and peer adoption. The firm presented that view as its own outlook rather than a direct finding from the 15 interviews. Several sovereign wealth funds in the sample remained in active due diligence, with some noting that building the necessary legal and regulatory infrastructure could take more than a year.

The report positions the recent drawdown as a test of investment theses rather than short-term price tolerance. Institutions that held firm treated crypto exposure as a long-term allocation decision, with Bitcoin serving as the core holding and other assets subject to clearer performance conditions.