Institutional Investors Stay Bullish on Crypto Despite Market Setback

Institutional investors appear largely unfazed by October’s steep cryptocurrency correction, with a majority maintaining and even expanding their confidence in digital assets. According to a new report from Swiss crypto bank Sygnum, released on Tuesday, over 61% of such investors plan to increase their exposure to cryptocurrencies in the coming months, while 55% maintain a bullish short-term outlook.

The findings are based on a global survey of 1,000 institutional investors, revealing that despite recent volatility, enthusiasm for the long-term potential of digital assets remains intact. About 73% of respondents said their investment decisions are driven by expectations of higher future returns, even as the market continues to recover from the $20 billion crash that rocked the crypto sector at the start of October.

However, ongoing uncertainty surrounding the Market Structure bill and the delayed approval of several altcoin exchange-traded funds (ETFs) has dampened some sentiment. Sygnum’s lead crypto researcher Lucas Schweiger said that the story of 2025 is one of “measured risk and powerful demand catalysts amid fiscal and geopolitical pressures.”

He added, “Investors are now better informed. Discipline has tempered exuberance, but not conviction, in the market’s long-term growth trajectory.”

Institutional Demand Remains Strong

Despite market turbulence, Sygnum noted that institutional participation remains at historic highs. The recent surge in ETF applications suggests that demand from major investors continues to build. 

Currently, at least 16 crypto ETF proposals are awaiting approval from U.S. regulators. This delay was attributed to the ongoing government shutdown, now in its 40th day.

Schweiger emphasized that such demand reflects growing maturity in the market. “October’s correction was more about recalibration than retreat. The appetite for regulated, transparent investment vehicles remains robust,” he said.

Staking ETFs Could Ignite the Next Wave

Looking ahead, crypto staking ETFs could serve as the next major catalyst for institutional investment. Sygnum’s report found that 80% of surveyed institutions expressed interest in ETFs beyond Bitcoin and Ether, with 70% saying they would either initiate or increase exposure if these products included staking rewards.

Staking, a process that locks tokens in proof-of-stake networks in exchange for passive rewards, is becoming increasingly attractive to institutions seeking yield without excessive risk.

With the U.S. government expected to resume normal operations soon, analysts anticipate that a wave of altcoin ETF approvals from the Securities and Exchange Commission (SEC) could follow. According to Sygnum, this could unleash the “next wave of institutional flows,” solidifying digital assets as a core component of diversified investment portfolios.