Institutional Investors Plan to Boost Digital Asset Allocations: Reports

More organizations are starting to invest in digital assets. According to State Street’s 2025 Digital Assets Outlook, nearly 60% of institutional investors plan to increase their investments in digital assets over the next year. The report also shows that these investors are becoming more confident in the long-term value of digital assets.

Analyzing State Street Digital Assets Reports

The report also notes that the average amount institutions invest in digital assets is expected to double in the next three years. This change shows a move from being cautious to making strategic investments. Interestingly, investors are moving beyond just speculation. They are now including crypto assets in their main investment strategies to gain benefits from innovation and diversification.

Another important finding is the growing interest in tokenization. More than 50% of institutional investors surveyed believe that by 2030, up to a quarter of their portfolios will be tokenized. This change will likely be led by private market assets, which are usually non-liquid assets. 

Undoubtedly, tokenization provides greater liquidity, transparency, and efficiency. These, and many more benefits, are key reasons for its growing use in alternative investments. State Street’s report also shows that tokenized real-world assets (RWAs) are becoming an important part of the digital asset market. 

The report also points out that clearer regulations and improved infrastructure are helping institutional investors feel more secure about digital assets. 

Tokenization Gains Ground in 2025

It is also worth noting that the tokenization of real-world assets has become one of the most prominent investment themes of 2025. Industry data shows that over $31 billion worth of assets are now represented on-chain. While US Treasury bonds and private credit led the early wave, tokenized stocks are emerging as the next major frontier.

Reports suggest that the SEC is considering a framework to enable traditional equity trading on blockchain networks, similar to cryptocurrencies. Recall that US broker-dealer Alpaca recently launched its Instant Tokenization Network (ITN). This new service allows institutions to mint and redeem tokenized US stocks directly.

State Street Pushes Into Tokenization to Modernize Finance

The global financial services provider has started exploring the use of blockchain technology and tokenization to modernize its operations. The move focuses primarily on tokenizing bonds and money market funds. This enhances operational efficiency and improves how assets are managed and traded.

State Street’s initiative aligns with a broader industry trend, allowing financial institutions to adopt blockchain-based solutions to optimize their services. Furthermore, State Street partnered with Taurus to advance its cryptocurrency custody and tokenization capabilities. The tokenization process involves converting traditional financial assets into digital tokens that can be traded and managed on blockchain platforms.