Shifting Drivers Behind Institutional Crypto Allocation

According to the report, 61% of surveyed participants intend to increase their exposure to digital assets, with 38% specifically planning to allocate more capital in the fourth quarter. Notably, the motivations fueling this momentum have evolved. Sygnum’s analysts highlight that diversification has overtaken broad “megatrend” narratives as the primary reason institutions are allocating to crypto.

Report lead author Lucas Schweiger notes that institutions increasingly view digital assets not simply as a defensive hedge, but as a way to participate in the structural transformation of global finance. The findings are based on responses from more than 1,000 professional and high-net-worth investors across 43 countries.

Active Management, ETF Expansion, and Rising Tokenization Demand

Active strategies have become the dominant institutional approach, with 42% favoring actively managed mandates and 39% leaning toward index-based exposure. Single-asset bets have fallen back as investors prioritize flexibility amid policy changes and market fluctuations.

Interest in crypto ETFs beyond bitcoin and ether is also accelerating. More than 80% of investors want broader ETF options, while 70% say they would boost allocations if staking were incorporated. Demand is particularly strong for Solana-focused and multi-asset products, aligning with the sustained inflows into U.S. spot SOL ETFs.

Tokenized real-world assets are another area gaining traction. Investor interest has surged from 6% to 26% year-over-year, reflecting increased confidence in regulated on-chain investment instruments such as tokenized bonds and funds.

Looking Ahead: Optimism for 2025, Caution for 2026

While 2025 is shaping up to be a year marked by disciplined risk-taking and robust demand catalysts, sentiment becomes more neutral heading into 2026. Concerns around regulatory uncertainty and slowing liquidity weigh on expectations.

Despite this, long-term conviction remains strong. A striking 91% of high-net-worth respondents consider crypto essential for wealth preservation, 81% regard bitcoin as a suitable treasury reserve asset, and nearly 70% believe holding cash carries a higher opportunity cost than holding bitcoin over a five-year horizon.

As Schweiger summarizes, investors may be approaching the market with greater discipline, but their underlying confidence in the asset class remains firmly intact.

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Background of the GENIUS Act and Its Global Impact

The GENIUS Act is widely seen as a crucial step in U.S. stablecoin regulations. The law encourages issuers to shift from yield-based models to payment-focused use cases. Fabian Dori, Chief Investment Officer at Sygnum, explains that the act aligns the U.S. regulatory framework more closely with the European Union’s MiCA (Markets in Crypto Assets) regulations. This move paves the way for global consensus on stablecoin regulation, creating a solid foundation for real-world use cases.

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According to Dori, the true impact of the GENIUS Act is far beyond regulatory clarity. By offering long-awaited transparency, it boosts confidence among organizations and issuers, encouraging the development of innovative killer apps that not only meet current customer needs but also create demand for entirely new services, including payment solutions.

New Payment Services and Applications Gaining Momentum

Industry giants like Mastercard and PayPal are already laying the groundwork for compliant stablecoin usage, while companies like Amazon and Walmart are exploring applications in payroll and cross-border settlements. These developments highlight the growing potential of stablecoins for payments.

Dori suggests that with interest-bearing stablecoins being limited, issuers will focus more on features like real-time settlement, low transaction costs, and programmable functionalities integrated into payment systems. In this competitive landscape, utility is expected to trump yield, and stablecoins will drive adoption in real-world commerce.

Consumer Adoption Remains the Key to Success

Despite these changes, retail adoption is still a crucial factor. Dori emphasizes that it is not fintech companies but consumer adoption that will determine the pace of stablecoin integration. Polygon Labs Head of Payments and Fintech, Aishwary Gupta, notes that even before the GENIUS Act, there was significant growth in payment-focused stablecoin usage. Gupta points out that Polygon has seen a 67% rise in micropayments, which shows how real-world demand is shaping this shift.

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Institutions Still Trust Ethereum

In its May 8 analysis, Sygnum acknowledged that current sentiment around Ethereum is weak, but emphasized that its security, stability, and long-standing presence still make it the go-to choice for traditional financial entities.

“We don’t see convincing indicators that Solana is ready to replace Ethereum at the institutional level,” the report noted.

Concerns Over Solana’s Revenue Composition

Although Solana has seen a spike in transaction volumes and network fees in recent months, Sygnum argues that much of this activity is tied to the memecoin sector, making the income generated appear volatile and unsustainable.

“The concentration in revenue sources creates a challenge for Solana to consistently outperform Ethereum.”

Additionally, it’s pointed out that most of Solana’s transaction fees go to validators, with limited direct impact on SOL’s token value.

Tokenomics Present a Mixed Picture

Solana’s tokenomics may be more adaptable than Ethereum’s, but this flexibility isn’t being fully utilized. In March, the Solana community voted against a proposal to reduce SOL’s inflation rate, signaling a reluctance to prioritize long-term token value growth.

Ethereum, meanwhile, is dealing with criticism over stagnant mainnet activity, largely due to the low-cost incentives for its layer-2 ecosystem. However, Sygnum notes that Ethereum still generates 2 to 2.5 times more revenue than Solana.

Transactions on Solana (purple) far exceed those on Ethereum and its layer 2s, but the latter has more value locked onchain.

Solana’s Path Lies in Sustainable Use Cases

Sygnum believes Solana could close the gap with Ethereum if it shifts its focus toward tokenization and stablecoins — areas where institutional interest and regulatory clarity are stronger, and where Ethereum currently dominates.

Still, Solana has made noticeable gains in the total value locked across DeFi protocols, reflecting growing user adoption. If these gains are paired with more stable revenue streams, the network could strengthen its competitive position.

Lastly, Ethereum’s recent strategic shift back to layer-1 development may help restore market confidence after a prolonged period of underperformance relative to Solana.

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In April, Bitcoin dominance reached its highest level in four years. This indicates that investors are turning to Bitcoin, which is seen as a safer haven. Still, Sygnum emphasized that new digital asset policies implemented in the United States—such as President Donald Trump’s “Digital Asset Reserve” initiative and progress in stablecoin regulations—may accelerate broader crypto adoption.

The bank foresees that protocols capable of attracting user attention will outperform others, and that Bitcoin’s market share may decline in this process.

Sygnum: Focus on Economic Value Heats Up the Competition

Sygnum highlighted that behind the increasing competition in the industry lies a strategic focus on creating economic value. This situation could pave the way for higher-quality projects to come to the forefront in terms of user experience.

The report pointed out that emerging projects like Toncoin, Sui, Aptos, Sonic, and Berachain have entered the competition with different approaches. While these high-performance blockchains offer alternatives to the limitations of leading networks like Ethereum, Solana, and Bitcoin, they still face challenges in gaining a broad user base and generating revenue.

In particular, Berachain’s system of incentivizing liquidity providers, Sonic’s developer-focused reward model, and Toncoin’s access to 1 billion users through Telegram integration were highlighted as sustainable strategies.

Layer-2 Solutions Also in Focus: Base Stands Out

In addition to altcoin-related developments, Sygnum’s report also covered Layer-2 solutions. Specifically, the Base network reached peak user and revenue numbers amid the recent memecoin frenzy. However, this surge quickly declined as interest in memecoins faded.

Despite this, Base remains a leader in key metrics such as daily transaction volume, throughput, and total value locked (TVL).

Memecoins Topped the Charts in Q1

In the first quarter of 2025, despite all price fluctuations, memecoins remained among the top choices for investors. According to data, memecoin projects attracted 27.1% of global investor interest, ranking just behind AI-focused tokens at 35.7%.

While retail investors continue to show interest in memecoins, institutional investors seem to be shifting toward Bitcoin. At least 12 publicly traded companies purchased Bitcoin for the first time in Q1 2025, bringing the total Bitcoin holdings of public firms to $57 billion.

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Sygnum plans to use this investment to expand into new regions, develop Bitcoin (BTC)-focused products, and pursue strategic acquisitions. The company also aims to expand into the European Union and the European Economic Area, as well as establish a regulated presence in Hong Kong.

Fulgur Ventures stands out as one of the key investors in this growth round, known for backing major platforms such as Blockstream.

In addition to Fulgur Ventures, other strategic and financial investors, as well as Sygnum’s co-founders, board members, and team members, participated in the funding round. The company still retains majority control over its shares.

Massive Surge in Crypto Trading Volume in 2024

Sygnum experienced over a 1,000% increase in trading volume in 2024 compared to the previous year, largely driven by its collaboration with the Swiss state-owned bank PostFinance.

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Sygnum also achieved significant success through its partnerships with AsiaNext digital asset exchange and Hidden Road, using its 24/7 multi-asset settlement network, Sygnum Connect. More than 20 banks the company partners with provide regulated crypto services to a third of Switzerland’s population.

Sygnum’s CEO Mathias Imbach stated that the unicorn status validates the company’s business model but expressed concerns that Switzerland is losing its status as a major digital asset hub: “Switzerland is losing its competitive edge compared to other jurisdictions. We must not ignore the importance of continuous innovation in the financial sector.”

Imbach added, “Sygnum’s mission is only at the very beginning,” highlighting the company’s future innovative steps.

About Sygnum

Founded in 2017, Sygnum holds a banking license in Switzerland and capital market services and major payment institution licenses in Singapore. The company has over $5 billion in client assets and received $40 million in investment from Azimut Holding, an Italian asset management group, last year.

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Managing approximately $4.5 billion in client assets, the bank did not disclose specific profit figures but highlighted substantial year-to-date growth in its operations.

In a press release, Sygnum reported a doubling of crypto spot trading volumes compared to the same period last year. Additionally, the company saw a 500% expansion in crypto derivatives trading and a 360% increase in lending volumes.

Sygnum’s staking business also experienced notable growth, with the percentage of Ethereum staked by clients rising to 42%. The bank highlighted that Ethereum staking for institutional clients offers benefits beyond the scope of ETFs, which do not include staking rewards.

Martin Burgherr, Sygnum’s Chief Client Officer, commented, “The approval and launch of Bitcoin and Ethereum ETFs marked a turning point for the crypto industry this year and led to a significant increase in demand for trusted, regulated exposure to digital assets.”

Licensed in Luxembourg since 2022, Sygnum plans to continue expanding in both the European and Asian markets, according to the statement.

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According to a report by the Financial Times, Binance’s new service will allow large investors to hold their crypto assets in independent banks. Eligible customers will be able to transfer their assets to trusted banks such as Sygnum and Flow Banks, leading banking institutions based in Switzerland. Binance will offer a more secure storage option by transferring customers’ funds to these banks, while asset trading transactions will only be carried out through Binance or Ceffu.

The sudden collapse of FTX (Binance)

The sudden collapse of FTX in 2022 raised concerns about the security of funds held on exchanges among crypto investors. In the wake of this event, traders and investors began to question the risks of funds on exchanges more. Independent custodians are subject to stricter regulatory oversight than exchanges, and it is emphasized that funds are safer in these types of organizations.

Binance has been working on this new custody solution for over two years. According to exchange officials, this development started before the FTX collapse and was launched at a time when counterparty risks were becoming apparent. However, Binance refrains from providing more details about the banks with which it cooperates. This new service aims to strengthen Binance’s reputation in the cryptocurrency market by offering its customers more security and flexibility.

The post Binance Offers Independent Custody to Large Customers appeared first on Coin Engineer.

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Gerald Goh, co-founder and CEO of Sygnum’s Singapore arm, said in a statement, “The broader industry is emerging from the ‘crypto winter’ and investors and market participants are increasingly looking to partner with trusted and well-managed financial institutions.”

“For Sygnum, this fundraising will allow us to further develop our suite of fully regulated solutions to support investors as they increase their exposure to the asset class.”

Sygnum plans to use the newly raised capital to expand and grow the bank into new markets and to further develop its regulated products, such as bank-to-bank digital asset services.

Goh said in the statement that Sygnum plans to enter one market in Europe and another in the Asia-Pacific region, but he could not provide further details due to the firm’s regulatory obligations.

The crypto bank raised $90 million in a previous Series B funding round completed in January 2022 with participation from several Asia-based investors, including Sun Hung Kai CO. &, Animoca Brands, and SBI Holdings.

According to the statement, Sygnum Bank, which is headquartered in Switzerland and Singapore, has also been granted operating licenses in Abu Dhabi and Luxembourg. The company added that it currently manages over $4 billion in assets from over 1,700 customers in 60 countries.

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