#BTCPullback

63% Institutions Invest in Crypto Assets for Diversification, Report Finds

Fund managers managing assets worth US$1.3 trillion cite diversification and client demand as the main reasons for their 63% crypto allocation. Speculation accounts for only 15%, a sharp decline compared to two years ago.

The CoinShares quarterly survey for May 2026 involved 26 institutional respondents. The results show that crypto assets are now more often chosen based on fundamentals, not just narrative momentum.

Diversification Replaces Speculation as the Driving Force for Allocation

Two years ago, speculation was the main reason for crypto asset allocation. Now, that figure has dropped to 15%. Meanwhile, diversification and client demand have surged from 36% to 63%, according to CoinShares.

“Two years ago, speculation was the primary reason fund managers held digital assets. Today, that figure is only 15%. Instead, diversification and client demand now account for 63% of the reasons for allocation,” explained James Butterfill, Head of Research at CoinShares, in the report.

Average weighted portfolio allocation has decreased to 0.1%, due to a larger sample of institutions. The median ownership remains at 1%, which is the default entry size for newly entering institutions.

Bitcoin Leads, Ethereum and Solana Strengthen

Bitcoin
BTCUSD
remains the top choice in growth prospects. However, sentiment toward Ethereum
ETHUSD
and Solana
SOLUSD
has increased compared to the previous quarterly survey.

BTC and ETH together represent 58% of investor portfolio responses. Old altcoins like Cardano
ADAUSDT
and Polkadot (DOT) are beginning to be abandoned in their portfolios.

Investors are also shifting toward Aave (AAVE), Sui (SUI), Tron (TRX), and decentralized finance (DeFi) protocols.

Corporate Restrictions Shift Regulation as the Main Barrier

Corporate restrictions are now the main obstacle to deepening allocations, replacing regulation as the primary barrier. The old system within large institutions still remains a major hurdle.

Quantum risk still frequently appears in client discussions. Meanwhile, concerns about reputation and volatility are starting to subside, but the numbers remain high. Most respondents have not yet decided whether the Fed has made policy mistakes or not.

Increased allocations exceeding the median 1% seem likely to depend on how quickly institutions can overcome their internal restrictions.