Institutional Investors Are Piling into Crypto — But a 2026 Downturn Is Looming: Sygnum

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respondents plan to expand their cryptocurrency investments by year-end, with 38% adding exposure in Q4 alone.The findings reflect growing confidence in digital assets as a long-term portfolio component, even after a sharp market correction in October that erased nearly $20 billion in market value.Sygnum said the shift marks a transition from speculative trading to strategic diversification. “Institutions are thinking less about crypto as defense and more about participation in the structural evolution of global finance,” said report author Lucas Schweiger.The survey covered over 1,000 professional and high-net-worth investors across 43 countries.While the short-term outlook remains strong, Sygnum’s data suggests the rally may cool in 2026 as liquidity slows and macroeconomic tailwinds fade. Source: Sygnum“The story of 2025 is one of measured risk, pending regulatory decisions, and powerful demand catalysts,” Schweiger wrote. “Discipline has tempered exuberance, but not conviction, in the market’s long-term growth trajectory.”About 55% of institutions remain short-term bullish, expecting further upside driven by ETF approvals and policy clarity.However, investor sentiment turns neutral to bearish beyond year-end, with slower growth expected by mid-2026 as rate cuts plateau and regulatory progress stalls.A major factor behind this shift is the growing concentration of Bitcoin holdings among large entities and regulated funds.CryptoNews analysis of CryptoQuant and Dune Data shows institutional and entity-scale holders have steadily absorbed more supply since spot ETF approvals in January 2024.Source: CryptoNews Retail investors, who once owned 17% of Bitcoin’s circulating supply in 2020, have reduced their holdings by roughly 20% over the past year, while ETF-related and institutional wallets now control over 7 million BTC.This reflects a broader structural change as large holders move funds into regulated ETFs for tax and compliance benefits, signaling deeper integration into traditional finance.Sygnum’s report also found that institutional interest in tokenized real-world assets like bonds and funds rose from 6% to 26% year-over-year.The bank said tokenization is becoming the gateway for conservative investors seeking regulated on-chain exposure.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,850.92 +4.31 (+0.06%)Dow 3048,254.82 +326.86 (+0.68%)Nasdaq23,406.46 -61.84 (-0.26%)Russell 20002,450.80 -7.48 (-0.30%)VIX17.51 +0.23 (+1.33%)Gold4,201.40 +85.10 (+2.07%)PortfolioSign in to access your portfolioSign inTop gainersMH McGraw Hill, Inc. 14.09 +2.72 (+23.92%)CNTA Centessa Pharmaceuticals plc 26.70 +4.16 (+18.46%)BBAI BigBear.ai Holdings, Inc. 7.17 +1.11 (+18.32%)ONON On Holding AG 41.51 +6.33 (+17.99%)ORLA Orla Mining Ltd. 12.04 +1.46 (+13.80%)Top losersDGNX Diginex Limited 14.00 -2.35 (-14.37%)CRCL Circle Internet Group 86.30 -12.00 (-12.21%)RGTI Rigetti Computing, Inc. 28.30 -3.10 (-9.87%)MENS Jyong Biotech Ltd. 36.70 -3.96 (-9.74%)DQ Daqo New Energy Corp. 32.15 -3.46 (-9.72%)Most activeOPEN Opendoor Technologies Inc. 9.37 +0.89 (+10.50%)BBAI BigBear.ai Holdings, Inc. 7.17 +1.11 (+18.32%)PLUG Plug Power Inc. 2.7300 +0.2000 (+7.91%)NVDA NVIDIA Corporation 193.80 +0.64 (+0.33%)AMD Advanced Micro Devices, Inc. 258.89 +21.37 (+9.00%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersCSCO Cisco Systems, Inc. 73.96 +2.25 (+3.14%)BTC-USD Bitcoin USD 101,793.87 -1,017.22 (-0.99%)LPTX Leap Therapeutics, Inc. 2.0500 +1.6125 (+368.57%)CRCL Circle Internet Group 86.30 -12.00 (-12.21%)DLO DLocal Limited 14.86 +0.34 (+2.34%)Top economic events