Institutions Maintain Crypto Positions Despite 50% Drop

The drop in the crypto market did not trigger any sales among the institutions tracked by Bitwise. Despite a decline of around 50%, none of the 15 structures surveyed reduced their exposure, and several even strengthened their positions. Bitcoin remains at the center of these allocations, often as the primary asset for these investors. Behind this stability, investors cite their long-term convictions, while Ether and Solana remain subject to specific exit conditions in their portfolios.

In Brief

• The 15 institutions surveyed by Bitwise did not reduce their crypto allocations despite a 50% drop.
• Bitcoin generally remains their primary crypto asset, the oldest and most significant.
• Ether and Solana remain subject to exit conditions related to their adoption and use.
• Spot crypto ETFs are gaining traction among institutional investors.

Strong Resistance Despite Market Drop

Bitcoin held a central place among all the institutions surveyed that held cryptocurrencies. Bitwise indicates that it generally represented their most significant and oldest position. For nearly all of these investors, it was the first crypto asset adopted. This age distinguishes its treatment.

None of the 15 institutions reported reducing their allocations during the approximately 50% drop. Several even took advantage of the decline to buy more. Respondents did not cite the drop in prices as a sufficient reason to sell. Their responses rather emphasized changes affecting their conviction.

The report is based on interviews conducted in late March and April. Bitwise surveyed professionals from endowment funds, foundations, public pension funds, and sovereign wealth funds. Family offices, consultants, and listed companies were also included in the sample. Crypto allocations represented 0.5% to 13% of investable assets, mostly from 1% to 2%.

Sale Conditions Remain Linked to Convictions

For these investors, a sale would primarily depend on a regulatory change or a credibility crisis in the sector. A failure of their investment strategy could also trigger a reduction in exposure. Thus, volatility alone is not the main criterion mentioned. This distinction sheds light on their behavior during the decline.

Bitcoin was often viewed as a store of value, sometimes compared to gold. This perception reinforces its historical status in portfolios. In contrast, convictions regarding Ether and Solana appeared less homogeneous. Some institutions had defined short horizons and specific sale conditions.

Several investors might sell Ether or Solana if the use of their networks did not benefit the tokens. The areas mentioned include stablecoins, decentralized finance, and tokenization. One institution without Ether or Solana, however, was widely using DeFi. According to Bitwise, it did not see how this activity could benefit the tokens.

Bitcoin ETFs Become a Preferred Channel

Almost all the institutions surveyed used spot crypto ETFs or planned to do so. Some investors were moving away from private placements and direct custody. This evolution also concerns access to digital assets. Bitwise's report highlights this preference.

Bitcoin remains involved in this trend, as ETFs are among the vehicles used. However, a 13F report from CoinShares published in June indicates a 17% decrease in professional exposure to U.S. spot bitcoin ETFs in the first quarter. Hedge funds and brokers accounted for about 96% of this decline. Banks, on the other hand, were increasing their exposure.

Bitwise's data show institutional exposure is little related to prices. Exit criteria focus on regulation, sector credibility, and strategy validation. For bitcoin, this logic is accompanied by a historical place. For Ether and SOL, the use of networks remains monitored. The future trajectory will depend on the evolution of institutional convictions. BTC retains a central position, while other assets remain tied to their uses.