Key Insights
- Institutional investors prefer crypto ETFs due to ease of use and familiarity.
- ETFs allow advisors to increase crypto exposure without complex decisions.
- Demand for crypto ETFs will likely grow steadily rather than dramatically.
- 70% of surveyed institutions have consistently favored crypto ETFs for years.
As the demand for cryptocurrency investments continues to grow, crypto exchange-traded funds (ETFs) may see more interest in the coming year. Bitwise’s Chief Investment Officer, Matt Hougan, explained that institutional investors prefer ETFs due to their simplicity and ease of use. These funds allow advisors to access crypto without the complexities of wallets or custody decisions.
WHY CRYPTO ETFs COULD SEE MORE DEMAND NEXT YEAR
Bitwise CIO Matt Hougan made a point that explains a lot about institutional behavior.
Most advisors don’t spend their days studying crypto. For many of them, it’s a small part of the portfolio and something they think about for… pic.twitter.com/RQ8Vtr6LUi
— CryptosRus (@CryptosR_Us) December 31, 2025
Hougan pointed out that for the past eight years, around 70% of surveyed institutions and advisors have chosen ETFs as their preferred method for crypto exposure. This trend is expected to continue into next year.
Advisors’ Preference for ETFs
For many institutional advisors, cryptocurrency is a relatively small part of their portfolios, and they do not devote significant time to researching it. “Most advisors don’t spend their days studying crypto,” said Hougan. Instead, they seek a familiar investment vehicle that requires little operational effort. This is why ETFs are attractive, as they easily fit into the existing processes of advisors.
ETFs are also seen as a safer choice because they are approved and regulated. With no need for decisions about custody or wallet management, they simplify the investment process. As more institutions move toward crypto, ETFs offer a smooth transition, making it easier for them to increase exposure gradually.
Steady Growth Expected in 2025
However, if institutional demand for crypto ETFs grows next year, it is likely to be gradual rather than dramatic. Hougan noted that such demand typically results in steady inflows and quiet allocation. As advisors add small portions of crypto to their portfolios, they will likely rely on ETFs rather than adopting more complex investment options.
This steady adoption trend reflects how institutional investors are increasingly comfortable with crypto, but prefer familiar tools like ETFs. The growing interest in crypto ETFs indicates that they will continue to play a key role in institutional crypto investment.
