State Street Survey Reveals Institutions Expect to Double Digital Asset Exposure by 2028

Executive Summary

Institutional investors are signaling a decisive shift in their approach to digital assets, with a State Street survey revealing that a majority anticipate doubling their digital asset allocations by 2028. This outlook underscores a growing confidence in digital assets as a long-term investment strategy, particularly with the rise of real-world asset (RWA) tokenization.

The Event in Detail

State Street's 2025 global research on digital assets and emerging technologies indicates a strategic commitment among institutional investors. The study, based on a global survey of senior executives, found that nearly 60% plan to increase their digital asset allocations within the coming year. Average exposure is projected to double within the next three years, with over half of surveyed institutions expecting 10% to 24% of their total portfolios to be tokenized by 2030.

The primary driver for the initial wave of blockchain adoption is identified as tokenized private markets, specifically private equity and private fixed income. Key benefits driving this adoption include increased transparency (52%), faster trading (39%), and lower compliance costs (32%). State Street, which oversees $49 trillion in assets, notes that 40% of institutions now operate dedicated digital asset units, signifying a maturation of institutional engagement.

Deconstructing Financial Mechanics and Business Strategy

The strategic focus on tokenizing private markets aims to unlock liquidity and efficiency in traditionally illiquid asset classes. This move reflects a broader trend where large global banks are conducting tokenized repo transactions worth billions, reducing counterparty risk and accelerating capital flows by cutting settlement times from days to hours. Tokenized assets on public blockchains have surpassed $28 billion, with U.S. Treasuries alone accounting for more than $6.6 billion in value.

This strategic pivot, driven by a need for portfolio diversification and a hedge against sustained inflation, aligns with a shift observed across the financial sector. A Coinbase and EY-Parthenon survey indicated that 76% of firms intend to invest in some form of tokenized assets by 2026, with 59% planning to allocate over 5% of assets under management to digital assets or related products. This expansion includes exploring tokenized alternative assets and leveraging stablecoins for yield and transactional convenience.

Broader Market Implications

This accelerating institutional adoption is poised to inject substantial capital into the digital asset space, enhancing liquidity, legitimacy, and innovation across the Web3 ecosystem. The increased integration of digital asset strategies by traditional financial institutions could positively influence regulatory discussions, particularly as mainstream adoption grows.

Inflationary pressures have played a role in this increased interest, with institutions viewing digital assets as an alternative investment during periods when traditional havens like government bonds underperform. According to the International Monetary Fund, inflation rates in 2024 have remained above target in leading economies, contributing to this strategic shift. Fidelity Digital Assets reports that over 60% of institutional investors currently hold digital assets, with many planning further increases.

Blockchain technology's inherent security, transparency, and efficiency are critical attractions. Implementations can lead to significant cost reductions: up to 15% in inventory costs, over 50% in fraud and error minimization, 20% in administrative expenses, and up to 40% in transaction times. These efficiencies are contributing to a projected institutional holding of 20% of Bitcoin's total supply by 2026, solidifying its role as a digital safe haven. The total crypto market capitalization surged to $4.3 trillion, representing a 91% year-over-year increase.

Regulatory frameworks are also evolving, with developments such as the GENIUS Act for stablecoins and the CLARITY Act addressing digital asset market structures. Initiatives like the SEC's Project Crypto and the CFTC's Crypto Sprint aim to provide clearer guidelines, though the SEC maintains that "tokenized securities are still securities," subject to existing federal laws.

Expert Commentary

Joerg Ambrosius, President of Investment Services at State Street, commented on the trend, stating:

The acceleration in adoption of emerging technologies is remarkable. Institutional investors are moving beyond experimentation, and digital assets are now a strategic lever for growth, efficiency, and innovation.

This sentiment reflects a consensus that early adopters of tokenization, artificial intelligence, and quantum computing are actively shaping the future of finance.

source:

[1] Majority of Institutions Expect to Double Digital Asset Exposure by 2028: State Street (https://www.coindesk.com/business/2025/10/09/ ...)[2] Institutional Investors Increase Exposure to Cryptocurrencies Amid Inflation Concerns | fintechnews.org (https://vertexaisearch.cloud.google.com/groun ...)[3] State Street Issues 2025 Digital Assets Outlook: Institutions Double Down on Tokenization (https://vertexaisearch.cloud.google.com/groun ...)

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