Institutional Investors Dip Their Toes in Historically Turbulent Crypto Waters

After years of ups and downs that effectively disqualified them as long-term portfolio holdings, crypto assets are staking a claim for investment legitimacy. Bitcoin’s sustained price above $100,000 – a floor in the eyes of longtime boosters – looks like a proxy for a sector that is attracting new classes of investors and official support from governments, some of them accumulating crypto reserves as well as regulating the products.

Typically wary of fads and volatility, pension funds are tentatively embracing crypto as a new alternative asset class to diversify their risk while addressing shortfalls in their retirement obligations.

Represented among participants in an EY Parthenon-Coinbase survey of institutional investor decision-makers were eight public funds and 12 private ones. All were investing in digital assets as of January, and 16 planned to increase those holdings this year. (Out of 352 total survey respondents, 86% had exposure to digital assets or planned to make digital asset allocations in 2025.)

Pension assets “are not sufficient to pay off in the long run,” says Vinod Jain, a strategic advisor in the capital...