Now that the crypto market news has seen a tremendous downturn, the question is, will the prior market projections stand in the light of recent events.
Some experts believe that this crash is a temporary phase, having predicted so. Accordingly, the market is likely to revive and resume its rally to new highs. An expert even went so far as to say,
“Bitcoin dumps closer to the $106k level and ETH dumps near $3800 or lower, and everyone will think Uptober is canceled.”
Recently in crypto news, State Street revealed that institutional investors plan to more than double their crypto allocations over the next three years.
The above observation is as per the asset manager firm’s third annual Digital Assets and Emerging Technology Study released recently.
As per the report, average portfolio allocation across digital assets stood at 7% in 2025. Target allocations were expected to rise to 16% by 2028.
The report is important given the relevance of State Street. The firm managed $4.7 trillion in assets under management (AUM) as of 2024. It is one of the world’s largest asset managers.
Crypto News: Who Led the Bitcoin Adoption
Asset managers demonstrated more exposure to crypto than asset owners in State Street’s survey.
Managers were twice as likely to hold 2-5% of their portfolios in Bitcoin. 14 maintained that allocation compared to 7% of owners.
Additionally, three times as many managers as owners held 5% or more of their AUM in Ethereum, at 6% versus 2%.
The most common forms for digital asset investments to take were stablecoins and tokenized versions of listed equities or fixed income, with respondents holding an average of 1% of their portfolios in each.
Across real‑world asset tokenization exposures, asset managers reported a higher exposure to tokenization of public assets than asset owners, at 6% versus 1%.
More than 25% of respondents identified Bitcoin as generating the highest returns among their digital asset portfolios.
At the same time, exactly one quarter predicted it would remain a top performer over the next three years.
Ethereum ranked second, with 21% citing it as their current biggest source of returns.
Institutions Accelerated Timeline for Digital Asset Adoption
State Street’s research revealed that 68% of respondents anticipated digital investment adoption would become mainstream within 10 years, more than double the 29% reported last year.
The survey showed 43% of respondents believed hybrid decentralized finance and traditional finance investment operations would be mainstream within five years, up sharply from 11% in 2024.
However, institutions remained cautious about the pace of growth. By 2030, slightly over half of respondents expected that between 10% and 24% of all investments would be made via digital assets or tokenized instruments.
Only 1% thought that most investments would be made in this way. Respondents anticipated cost savings of between 23% and 37% of current expenditures across operational area.
Improved revenue or investment performance was expected to average between 25% and 33%.
The industry identified a lack of awareness among institutional investors, cybersecurity concerns, and the absence of regulatory clarity as the primary barriers to adoption.
Crypto News: Platform Approvals Unlocking Trillions in Capital
Bitwise CIO Matthew Hougan noted that Morgan Stanley’s Global Investment Committee published a report allowing its 16,000 advisors managing $2 trillion to allocate to cryptocurrency as part of multi‑asset portfolios flexibly.
The firm suggested allocations up to 4% could be appropriate for risk‑tolerant investors.
Wells Fargo, which managed roughly $2 trillion in AUM, also recently pivoted to allow advisors to allocate on behalf of clients.
Hougan also noted that UBS, Merrill Lynch, and other major wealth managers were likely to follow suit.
The platform approvals came after years of restrictions that prevented the largest wealth managers from accessing Bitcoin exchange‑traded funds (ETFs).
Hougan wrote that serious pent‑up demand existed among advisors, and meaningful flows were expected in the fourth quarter as tens of thousands of financial professionals processed the new guidance.
Debasement Trade Drove Institutional Demand
Bitcoin and gold emerged as the best‑performing major assets of 2025 not too long ago. It validated what Wall Street termed the “debasement trade.”
The strategy involves investing in assets positioned to perform well if governments debased or degraded their currencies through monetary expansion.
Hougan, from Bitwise, stated that JPMorgan’s report on the debasement trade on October 1, signaled the strategy was going mainstream.
He also noted that when advisors conducted annual reviews with clients, they wanted year‑end printouts to show holdings in the most successful investments.
Bitcoin’s price reached a new all‑time high of $126,000 in early October. Bitcoin ETFs attracted $3.5 billion in net flows during the first four trading days of the fourth quarter.
Historical patterns showed that in every quarter where Bitcoin posted double‑digit positive returns, ETFs also recorded double‑digit billions in inflows.
As a result, a bullish report regarding steady institutional adoption by State Street aligns with the current favorable backdrop for Bitcoin.
The current market is not looking very good for Bitcoin adoption. However, up until now, signals suggested that the stage was set for a more pragmatic approach.
The hope is that crypto adoption across institutional portfolios, may boost crypto performance in the fourth quarter.