Diversification drives 63% of institutional crypto allocations

The May 2026 CoinShares quarterly survey collected responses from 26 institutional fund managers overseeing $1.3 trillion in assets. Respondents reported that diversification and client demand account for 63% of their allocations to digital assets, while speculation accounted for 15%.

James Butterfill, head of research at CoinShares, noted that “Two years ago, speculation was the leading reason fund managers held digital assets. Today it sits at 15%. In its place: diversification and client demand are now 63% of the allocation rationale.” The report says the combined share for diversification and client demand rose from 36% two years earlier.

The weighted average portfolio allocation to crypto fell to 0.1%, a result the report attributed to a larger, more conservative institutional sample. The median holding remained at 1%, which CoinShares described as a typical entry size for new institutional capital.

Bitcoin remained the top asset in growth expectations, while sentiment shifted modestly to Ethereum and Solana compared with the prior quarter. Together, Bitcoin and Ethereum accounted for 58% of portfolio responses. Cardano and Polkadot lost ground, and institutions increased exposure to tokens linked to decentralized finance and newer smart-contract platforms including Aave, Sui and Tron.

Respondents identified corporate restrictions, including legacy systems and internal processes, as the main barrier to expanding crypto allocations, overtaking regulatory concerns. The report also said quantum risk has begun to appear in client discussions, and that worries about reputational risk and price volatility have eased somewhat but remain elevated.

The survey found no clear consensus on whether the U.S. Federal Reserve has made a policy error. CoinShares stated that larger allocations above the 1% median will depend on how quickly firms can resolve internal restrictions and update systems to accommodate bigger crypto positions.