How Crypto Markets Are Entering Their Institutional Era?

For many years since its inception, crypto has been led by retail investors, early tech enthusiasts, and a large chunk of high-conviction whales. The idea that publicly listed companies, sovereign funds, pensions, and Wall Street giants like BlackRock would drive the market was more of a dream, until recently. The introduction of ETFs has changed the way people (both retail and institutions) see crypto. Today, crypto has taken a 180-degree turn from a retail-driven market to an institutional-driven market. 

In the past 2 years alone, we have seen institutional participation go through the roof as the world slowly moves towards a digital economy. And as the regulatory concerns are being addressed, institutions see crypto as an asset class that can act as a hedge against de-dollarisation, geopolitical uncertainty, and even inflation.

The Impact of ETFs on the Market

The turning point came in January 2024, when the U.S. Securities and Exchange Commission (SEC) approved eleven spot Bitcoin ETFs. In just 18 months, these products accumulated over 1.6 million BTC (about 7.74% of total supply) with the AUM exceeding $152 billion. BlackRock’s iShares Bitcoin Trust became the fastest ETF in history to hit $70 billion, reaching that milestone in just 341 days, which is five times quicker than the gold ETF.

By removing the operational frictions of custody, compliance, and accounting, they opened the door to pension funds, insurers, and registered investment advisers. Allocations that were once only imaginary are now flowing in steadily through regulated streams, increasing institutional exposure to crypto by the day. Even after early-2025 rebalancing, institutional holdings via ETFs still make up more than 22% of total ETF AUM.

Public Companies Building Crypto Treasuries 

While ETFs grab headlines, much of the accumulation is driven by public and private companies like Strategy, Meta Planet, Tesla, and many others. So far, such public companies have acquired over 951,254 Bitcoins, controlling about an additional 6% of the supply. Interestingly, even Ivy League colleges like Harvard and Brown University have exposure to crypto through ETFs.

Moreover, corporates did not stop with just accumulating Bitcoin. Companies like Sharplink, Bitmine, and even Indian listed companies like Jetking Infotrain have started building Ethereum treasuries, acquiring over 3.7 million ETH, controlling about 3.06% of the supply.

Such high accumulation phases would significantly impact the market. First of all, it alters the supply and demand of the token by taking a large amount of the crypto out of circulation. Second, it transfers ownership to organizations with longer investment horizons, which decreases the possibility of volatility and panic-driven selling.

Growing Interest from Governments

Another significant sign of crypto’s maturation is that governments are starting to think about it in the same way as gold and foreign currency reserves. Several G20 economies are studying the feasibility of holding Bitcoin as part of a diversified strategic reserve, and this move would formalize its role as a macroeconomic hedge.

The logic is straightforward: in an era of rising geopolitical tension and currency diversification, a non-sovereign, globally traded, scarce asset has appeal. Pilot programmes in smaller economies, including tokenized government bonds held alongside Bitcoin, suggest this could move from theory to policy within the decade. In the U.S., Congressional committees are already reviewing studies on a federal-level “digital reserve asset” programme, which would mark a profound shift in the asset’s legitimacy.

Increasing the Bar for Market Infrastructure

Institutions require infrastructure that meets the operational, risk, and compliance standards of traditional finance. Over the past five years, more than $100 billion has been invested by banks into blockchain infrastructure. JPMorgan’s Onyx network now processes $1 billion a day in payments using its own digital coin. HSBC has tokenized vaulted gold for fractional trading, while Goldman Sachs’ GS DAP platform is settling repo transactions on-chain. This raises the stakes for regulatory clarity, settlement infrastructure, and market integrity. With large players come larger systemic considerations.

If the last cycle was about proving crypto could survive, this one is about proving it can integrate into the existing financial ecosystem. The coming years will likely see government’s trialing strategic Bitcoin reserves, expansion of ETF products into multi-asset baskets, widespread use of tokenized assets and stablecoins for global money movement, increased OTC market transparency as stronger regulations take shape.

Institutions aggressively entering the crypto space show a clear shift in the way crypto is viewed in the global economy. What began as a retail investor’s hedge against fiat currency has now grown to become a global hedge against sovereign funds, with the potential to change the current financial ecosystem.

Edul Patel is the Co-founder and CEO of Mudrex.