Bitwise Research: No Reduction in Crypto Holdings by 15 Large Institutions During 50% Market Pullback
Bitwise released its first institutional crypto asset adoption report, based on interviews with investment professionals responsible for crypto allocations at 15 large institutions. The report shows that from Q4 2025 to Q2 2026, the overall crypto market pulled back by about 50%, yet none of the interviewed institutions reduced their crypto asset allocations; several even increased their positions against the trend, and no institution cited price declines as a reason to exit.
The interviewees included a wide range of entities such as university endowments, foundations, public pensions, sovereign wealth funds, family offices, investment advisory firms, and publicly listed companies. The interviews were conducted anonymously mainly between late March and April 2026. Bitwise Chief Investment Officer Matt Hougan stated that the speed and stability of institutional adoption of crypto assets exceeded public expectations. Research Director Ryan Rasmussen noted that while the scope of authority, governance structures, and constraints varied among these institutions, their views on crypto allocations were remarkably consistent.
Bitcoin is the only consensus asset. All interviewed institutions holding crypto assets possessed Bitcoin, which was also their earliest purchase, largest position, and longest-held cryptocurrency. Most institutions position Bitcoin as a store of value asset, alongside gold, used to hedge against fiat currency depreciation, holding it through spot ETFs or direct ownership.
In contrast, institutions had markedly different attitudes towards Ethereum and Solana. Both had smaller positions than Bitcoin, shorter assessment periods, and were viewed as early-stage tech venture investments rather than alternatives to Bitcoin. Institutions closely track stablecoin trading volumes, DeFi activity, and fee distributions to assess whether network growth can translate into token value. Some institutions set clear exit conditions; one respondent holding crypto assets for about 10 years stated, "There has to be something that works. If it doesn't work by a certain time, we will exit." During the report period, Ethereum fell by 25.4% in one quarter, while Bitcoin dropped by 14.2%.
In terms of allocation ratios, the crypto assets of the interviewed institutions accounted for between 0.5% and 13% of their investable assets, with most between 1% and 2%. Family offices had a higher ratio, while sovereign wealth funds had a lower one. Holdings were distributed across various channels including spot ETFs, direct holdings, venture capital funds, and hedge funds. Almost all institutions are already using or planning to use spot ETFs, citing lower costs, lighter operational burdens, and greater familiarity among back-office staff.
The report also listed barriers to adoption: the more governance and approval layers there are, the lower the allocation ratio. Custodial infrastructure thresholds, concerns about the careers and reputations of investment personnel, and regulatory uncertainties all limit the expansion of positions.
In terms of market mechanisms, this round of approximately 50% pullback mainly stemmed from the liquidation of leveraged and short-term funds, while these long-term allocation institutions did not sell off, with some even increasing their positions at lower levels. Funds primarily flowed in through spot ETFs, benefiting ETF issuers, custodians, and market makers, with Bitcoin receiving the majority of institutional inflows due to its strongest consensus. Assets like Ethereum and Solana, which still need to prove their value capture capabilities, are under pressure; they are conditionally held in institutional portfolios and will be the first to be reduced if network growth does not translate into token value.
Source: Public Information
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Bitwise was founded in 2017 by Hunter Horsley and Hong Kim. In its founding year, it launched an index fund tracking 10 mainstream crypto assets, which later traded over-the-counter as BITW. In 2019, it applied to the SEC for a Bitcoin ETF, which was rejected in October of the same year due to market manipulation risks. It wasn't until January 2024 that the spot Bitcoin ETF was approved, leading to the listing of BITB, and that same year it acquired European crypto ETP issuer ETC Group to expand its overseas product line. Chief Investment Officer Matt Hougan, who previously served as CEO of ETF.com, has been promoting a "1% to 5% crypto allocation" framework to institutions over the past few years. The conclusions of this report also provide evidence of demand for its ETF product line.
The flow of institutional money over the past few years can be seen from public holdings. Harvard University's endowment disclosed in its 2025 13F filing that it held approximately $116 million in IBIT; Abu Dhabi's sovereign fund Mubadala once held over $400 million in IBIT; the Wisconsin Investment Board bought IBIT in 2024 and sold all of it in Q1 2025, indicating that governance constraints on public pensions directly affect positions. Yale's endowment has been indirectly allocating through Paradigm and a16z's crypto funds since 2018. The path is clear: first participate indirectly through venture capital funds, then directly allocate through spot ETFs, and finally consider direct holdings and self-custody.
The closest historical reference is the gold ETF. In 2004, State Street launched GLD, allowing pensions and endowments to allocate to gold like buying stocks, eliminating the backend costs of vaulting, insurance, and transportation. In the following years, the scale of gold held by GLD rapidly ranked among the top globally, and gold transitioned from a fringe asset to a standard allocation in institutional portfolios. An earlier reference is the Yale model: David Swensen began introducing private equity and venture capital into endowments in the 1980s, transforming alternative assets from nearly zero to the mainstay of portfolios over 20 years. Crypto assets are currently transitioning from experimental allocations to standard allocations, with the 1% to 2% ratio comparable to the initial levels of institutional allocations to gold and alternative assets.
Structurally, this issue belongs to capital concentration. When institutions allocate to a certain asset class, the biggest obstacles often lie not in the asset itself but in governance approvals, custodial compliance, and backend accounting costs. Spot ETFs compress these costs into a single stock code, so once institutional funds enter the crypto market, they tend to concentrate on a few ETF issuers and custodians, and also on Bitcoin, which has the strongest consensus. ETH and SOL are subjected to venture-style assessments, indicating that institutions only treat Bitcoin as an "asset class," while other tokens still need to prove their cash flow logic. The more concentrated the funds, the greater the valuation divergence between Bitcoin and other assets.
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