Over the next three years, a significant majority of institutional investors intend to increase their allocations to digital assets. More than 50% anticipate that tokenized assets will constitute 10-24% of their total investments by 2030, as indicated by State Street’s 2025 Digital Assets and Emerging Technology Study.

The report, which gathered insights from senior executives in asset management and ownership firms, highlights a transition of digital assets from experimental ventures to key components in institutional portfolios.

Key Portfolio Adjustments

Currently, institutional portfolios allocate around 7% of their assets to digital instruments, which includes cryptocurrencies, digital cash, and tokenized stocks or bonds. In just three years, the expected percentage is anticipated to rise to 16%. Digital cash and tokenized public and private assets are emerging as the most popular forms of exposure, with an average of 1% allocation reported in each category.

Notably, asset managers exhibit a deeper engagement with digital assets compared to asset owners; they are twice as inclined to allocate 2-5% of their portfolios to Bitcoin and more likely to allocate 5% or greater. Additionally, Ethereum allocations for managers surpass those of owners by a factor of three.

Moreover, 6% of asset managers have at least 5% of their portfolios invested in smaller cryptocurrencies, meme coins, and NFTs, contrasting sharply with only 1% of asset owners, showcasing early-stage experimentation in digital instruments.

Tokenization Surge Ahead

The trend toward tokenization of real-world assets is gaining prominence. Managers report greater exposure to tokenized public assets (6% as opposed to 1%), private assets (5% versus 2%), and digital cash (7% compared to 2%). By 2030, more than half of the participants expect between 10% and 24% of their total portfolios to encompass tokenized or digital assets, marking a significant shift towards blockchain-enabled investment strategies, despite few anticipating full tokenization of their investments in the near term.

Despite the considerable allocation toward stablecoins and tokenized assets, cryptocurrencies remain the primary drivers of returns. Over a quarter of surveyed participants identified Bitcoin as the standout performer within their digital asset holdings, closely followed by Ethereum. Although tokenized public and private assets currently contribute less to total returns, their significance is projected to grow as the market matures.

Additional Information

For more insights, State Street’s study suggests that private assets are likely to be the first major sectors to benefit from the broader tokenization trend, as institutions expect digital assets to become a standard part of their portfolios over the next decade. While adoption is on the rise, institutions approach this evolution with caution, emphasizing strategic alignment, efficiency, and regulatory compliance.