Institutional Investors Signal Renewed Confidence in Crypto Despite Market Downturn

Key Takeaways

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  60% of institutional investors plan to increase crypto allocations despite recent market volatility.
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  Staking-enabled ETFs are emerging as a leading catalyst for new institutional interest.
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  Pending regulatory decisions, including ETF approvals, are likely to shape the next wave of market movement.

Institutional confidence in digital assets remains firm even after October’s sharp market correction, with many large investors preparing to expand their holdings, new research from Swiss crypto banking group Sygnum shows.

Majority Plan to Increase Exposure

Sygnum’s latest industry survey, which gathered responses from 1,000 institutional investors worldwide, found that more than 60% intend to increase their cryptocurrency allocations in the coming months. Additionally, over half of the respondents maintain a bullish outlook for the near term, suggesting that recent volatility has not shaken their long-term conviction.

For roughly 73% of participants, the main draw remains the potential for higher future returns, despite the sector still stabilizing after the early-October market crash that erased $20 billion in value.

Regulatory Delays Temper Short-Term Sentiment

However, uncertainty tied to unresolved regulatory developments continues to weigh on momentum. Delays affecting the U.S. Market Structure bill, alongside the wait for new altcoin exchange-traded fund (ETF) approvals, have held back broader market enthusiasm. Some analysts believe this regulatory overhang could stretch into 2026.

Sygnum’s lead digital asset researcher, Lucas Schweiger, noted that institutional behaviour has shifted toward “measured participation,” emphasizing strategy and diversification rather than aggressive speculation.

“Discipline has tempered exuberance, but not conviction,”

Schweiger said, pointing to continued market maturity amid political and economic pressures.

Staking-Enabled ETFs Seen as Next Growth Driver

One evolving area of interest among institutional investors is crypto ETFs that include staking features. Over 80% of respondents said they would consider ETFs beyond Bitcoin and Ether, while 70% indicated they would allocate more capital if ETFs offered staking rewards.

Staking allows investors to lock tokens into proof-of-stake networks to support blockchain operations in exchange for yield — a feature seen as increasingly attractive in a low-return environment.

Potential “Bulk Approvals” Ahead

With at least 16 ETF applications currently pending, market participants are now watching closely for the conclusion of the ongoing U.S. government shutdown, which has delayed regulatory processing. Sygnum believes the reopening of federal operations could lead to a wave of ETF approvals, potentially triggering the next phase of institutional inflows.