A recent survey indicates that a majority of institutional investors believe Bitcoin is currently undervalued. This sentiment, gathered from decision-makers at 352 firms globally, was highlighted in a study conducted by Coinbase and EY-Parthenon in January 2025. The survey suggests a growing optimism among institutional investors regarding the future of cryptocurrency, building on the momentum gained after a landmark year for crypto in 2024.
The study reveals that surveyed investors are confident about the potential for attractive investment returns from cryptocurrencies, as well as the prospects for stablecoins, DeFi (Decentralized Finance), and tokenization. A significant portion of these investors are planning to allocate more than 5% of their Assets Under Management (AUM) to crypto in 2025, signaling a move beyond considering it a niche asset class.
Several factors are driving this increased interest, including the anticipation that greater regulatory clarity will unlock new opportunities in digital assets, particularly concerning custody solutions. Despite the optimism, the still-developing regulatory landscape is also viewed as one of the main challenges facing the industry.
Specifically, 83% of the surveyed investors plan to increase their allocations to crypto in 2025, driven by the belief that cryptocurrencies offer the best opportunity to generate attractive risk-adjusted returns over the next three years. Furthermore, a clear majority, 59%, intend to allocate more than 5% of their AUM to crypto as it becomes a more established part of institutional portfolios.
Stablecoins are also gaining traction, with 84% of surveyed investors either currently using them or expressing interest in doing so. Investors are finding diverse use cases for stablecoins, further solidifying their importance in the digital asset ecosystem.
Coinbase is strategically positioning itself to cater to institutional clients through services like Coinbase Business and Coinbase Advisor. These expansions indicate a push to serve more institutional, corporate, and advisory clients, potentially reshaping its revenue mix. In 2025, Coinbase solidified a dominant position in the digital derivatives space through the $4.3 billion acquisition of Deribit, which holds approximately 80% of the global market share in crypto options.
Bank of America analysts have also expressed a positive outlook on Coinbase, reiterating a "Buy" rating on the stock, citing product expansion, strategic pivots, and a lower valuation as reasons for optimism in 2026. Analyst Craig Siegenthaler believes that the acceleration of product velocity could be a turning point, as Coinbase expands its reach into stocks, ETFs, and prediction markets.
