The Return of Institutional Interest in Digital Assets: A Measured Comeback

A Front-Row View of Changing Sentiment

The institutional investment world is showing renewed interest in digital assets after years of skepticism and caution, according to Ron Biscardi, CEO of iConnections, one of the world’s premier capital introduction conference organizers. With over 25 years in the alternative investment industry under his belt, Biscardi operates a platform representing an astounding $55 trillion in assets, giving him unprecedented insight into how the world’s largest investors think and act. His firm meticulously tracks thousands of annual meetings between fund managers seeking capital and institutional investors looking for opportunities, creating a unique dataset that reveals shifting attitudes in real-time. What that data shows is encouraging for the crypto industry: after enduring what Biscardi describes as a couple of “rough” years following the spectacular collapse of FTX in 2022, institutional sentiment toward digital assets has stabilized and is cautiously improving. At last year’s conference, interest began showing signs of life again, and by 2025, the trend became unmistakable—funds were returning to the space and willing to commit capital once more. The changing regulatory landscape in Washington, with hints of a more crypto-friendly approach from policymakers, has helped fuel this cautious optimism, even though concrete regulatory progress has been frustratingly slow. Biscardi characterizes the current mood as “more normal”—not the irrational exuberance that preceded past crashes, but also not the complete aversion that dominated in the immediate aftermath of major scandals.

The Numbers Tell a Story of Recovery

The concrete data from this year’s iConnections event provides compelling evidence of this shift in institutional attitudes. More than 75 digital asset funds participated, generating approximately 750 meetings between managers and potential allocators—a participation level comparable to 2022 when crypto interest was near its peak, just before the FTX implosion brought the sector crashing down. Perhaps most significantly, nearly one-quarter of limited partners on the iConnections platform now indicate active interest in digital asset strategies, a statistic that demonstrates crypto has evolved from a fringe speculation into an established component of alternative investment portfolios. Family offices represent the largest group of limited partners expressing interest in digital assets, which aligns perfectly with their historical pattern of backing emerging and innovation-driven asset classes before more conservative institutional money arrives. This trend has been building momentum for several years now, as family offices—managing wealth for ultra-high-net-worth individuals and families—have shown themselves willing to take calculated risks on new technologies and asset classes that traditional institutions initially avoid. Meanwhile, traditional wealth managers, particularly those operating in crypto-friendly jurisdictions like Dubai, Switzerland, and Singapore, find themselves under mounting pressure from their wealthy clients to provide access to digital asset investments, creating a push-pull dynamic that’s driving broader adoption across the wealth management industry.

Surviving the Crypto Winter

What makes this renewed institutional interest particularly noteworthy is that it’s occurring despite challenging market conditions that might have completely derailed interest in previous cycles. Bitcoin has declined nearly 25% since the beginning of the year, and its market capitalization has shed more than a trillion dollars in value since reaching all-time highs last October. Popular crypto-related stocks like Coinbase and MicroStrategy (now trading as Strategy) have also suffered significant declines this year, underperforming most other technology stocks during a period when tech has generally struggled. Yet institutional interest persists through this “crypto winter,” suggesting a fundamental change in how sophisticated investors view digital assets—less as a get-rich-quick speculation and more as a legitimate asset class that merits consideration despite volatility. Biscardi believes digital asset managers are “very, very close to achieving institutional legitimacy,” with Bitcoin already having crossed that threshold in his assessment. Alternative cryptocurrencies are approaching that same level of acceptance, though they still face more skepticism than Bitcoin. According to Biscardi, the final piece of the puzzle is establishing a clear regulatory framework that allows institutions to participate safely and confidently, knowing they’re operating within well-defined legal boundaries that protect both them and their beneficiaries.

Regulatory Concerns Remain the Primary Obstacle

For chief investment officers at institutions managing billions or trillions of dollars, regulatory uncertainty dominates all other considerations when evaluating digital assets. “The regulatory hurdles are number one,” Biscardi states flatly, emphasizing that this issue repeatedly surfaces in conversations with institutional allocators. “It just always goes back to that.” The reason is fundamental to how large institutions operate: they’re fiduciaries managing other people’s money, not their own capital that they can deploy with complete discretion. Whether managing pension fund assets for retirees, endowment funds for universities, or insurance reserves for policyholders, these institutional investors bear a legal and ethical responsibility to invest prudently and in accordance with clear guidelines. Digital assets might represent a fascinating and potentially lucrative category, but institutional fiduciaries simply won’t allocate significant capital until they can confidently explain to their boards, regulators, and beneficiaries that they’re doing so in a responsible, legally compliant manner. This conservative approach isn’t about being behind the times or failing to understand innovation—it’s about fulfilling fiduciary duties and avoiding the career-ending risk of a major allocation to an asset class that later faces regulatory prohibition or restriction. The good news, however, is that the fundamental nature of the conversation has evolved considerably since 2022, when some investors still questioned whether cryptocurrency represented anything real or was simply an elaborate Ponzi scheme. “I don’t hear any of that anymore,” Biscardi notes, suggesting that the basic legitimacy debate has largely been settled in crypto’s favor, even if implementation details remain works in progress.

Conservative Capital Begins Testing the Waters

Evidence of crypto’s growing acceptance can be found in the types of institutions beginning to allocate capital to the space. University and foundation endowments, which typically prioritize long-term stability and avoid making large bets on volatile new asset classes, have begun adding exposure to bitcoin and ether through exchange-traded funds. This represents a significant vote of confidence from some of the investment world’s most risk-averse participants. These endowments aren’t attempting to overhaul their entire investment portfolios or make crypto a core holding, but rather are adding measured, carefully sized positions that could enhance overall returns during periods when digital asset markets perform well. This approach reflects a pragmatic investment thesis: with many market observers expecting equity returns over the coming decade to be more muted than the exceptional gains of the past ten years, even conservative institutions are looking for additional return sources that might provide uncorrelated or differentiated performance. However, institutional allocators still view bitcoin primarily as a risk asset rather than the “digital gold” or store of value that crypto advocates often claim. “Bitcoin just hasn’t behaved that way,” Biscardi observes, noting that during periods of market stress, bitcoin has tended to correlate with equities rather than serving as a safe haven like gold traditionally does. This behavioral pattern influences how institutions size their positions and think about bitcoin’s role in portfolios—more as a growth-oriented risk asset than as portfolio insurance.

How Institutions Are Actually Accessing Crypto

When it comes to implementation, direct token purchases remain extremely rare among institutional investors, who instead prefer accessing digital assets through exchange-traded funds and structured fund vehicles. This preference reflects both regulatory concerns and operational realities—institutions often lack the internal expertise and infrastructure to securely custody digital assets directly, and their compliance frameworks are built around traditional investment structures. Limited partners rely heavily on general partners (the fund managers) to make specific decisions about which cryptocurrencies to hold, what blockchain protocols merit investment, and when to rebalance allocations. This delegation of decision-making represents a natural extension of how institutional capital has always operated: investors select skilled managers and trust them to execute strategy within agreed parameters. Meanwhile, cryptocurrency companies have significantly increased their visibility at institutional events, recognizing that building relationships with allocators is essential for long-term growth. According to Biscardi, sponsorship participation at this year’s iConnections event saw a substantial uptick, with companies like BitGo, Galaxy Digital, Ripple, and Blockstream all securing top-tier sponsor status. This marketing investment reflects these companies’ understanding that institutional adoption, though slow, represents the next major frontier for digital asset growth—and that patient relationship-building today will pay dividends as regulatory clarity eventually arrives and opens the floodgates to larger allocations from the world’s biggest pools of capital.