Crypto market regulatory clarity was cited as the top catalyst for growth in the digital asset industry

86% of those surveyed said they had exposure to digital assets or planned to make allocations in 2025, and 84% said they had increased allocations to crypto

A new survey by crypto exchange Coinbase (COIN) and consulting firm EY-Parthenon (EYP) has identified regulatory clarity as the main catalyst for growth in the digital asset industry.

The report, released on Thursday, is based on a survey of 352 institutional investors in the U.S., Europe and Asia-Pacific. The interview period was January 13 to 24.

Among those surveyed, 86% said they had exposure to digital assets or planned to make allocations by 2025. A vast majority, 84%, said they had increased allocations to crypto and crypto-related products in 2024.

Of those surveyed, 59% planned to allocate more than 5% of their assets under management to cryptocurrencies in 2025. Among hedge funds, that figure rose to 79%.

An improving regulatory backdrop is viewed as a large tailwind for the digital asset industry, according to the report.

The President has promised to make the U.S. the “crypto capital of the world,” and his administration has been working on creating clear regulatory frameworks for the industry.

“We are focused on making sure that the United States remains the leading financial technology center of the world and that we don’t cede that to another country,” Trump said at the White House last month.

The administration has also been working on reducing the tax burden on crypto investors.

In April, the administration proposed a rate of 15% on cryptocurrency gains realized by individuals and trusts, in a departure from capital gains tax rates that vary based on an investor’s income level and how long they hold an investment.

The move came after members of Congress had pushed for a lower tax rate on crypto to encourage investment in the nascent technology.

The administration’s proposal is part of a broader effort to adjust the tax code and raise revenue to reduce the federal deficit.

Congress will ultimately decide on the tax rate for cryptocurrency gains.

Altcoins are also becoming increasingly popular amongst institutional investors, according to the survey. 73% of respondents said they held tokens other than bitcoin (BTC) and ether (ETH), led by hedge funds at 80%.

Among the altcoins that investors are interested in include tokens used in decentralized finance (DeFi) protocols, non-fungible tokens (NFTs), and metaverse projects.

Coinbase and EYP also found that about half of the institutional investors surveyed said they leverage stablecoins, with yield generation, transactions, and foreign exchange cited as the main use cases.

Among institutional investors in Europe, 60% said they preferred to gain exposure to crypto via registered vehicles such as exchange-traded products (ETPs). In the U.S., 54% of respondents said they planned to use mutual funds, while 44% said they planned to invest via a private credit fund.