Bitwise: Crypto institutions stayed invested despite 50% drawdowns

Bitwise’s first Institutional Crypto Adoption Report, based on interviews with 15 asset owners conducted in late March and April, suggests that the institutions that hold crypto were far more resilient during a major drawdown than many might expect. According to Bitwise, none of the surveyed organizations cut their crypto allocations during an approximately 50% market decline that began in October 2025—though several said they added.

Across the group, Bitcoin (BTC) was the core holding. Every institution in the sample that owned crypto held BTC, typically as its largest and longest-standing position. Ether (ETH) and Solana (SOL) were present too, but generally in smaller allocations tied to clearer conditions for when (and whether) those positions should be maintained.

Key takeaways

• During a roughly 50% drawdown, none of the 15 interviewed institutions reported reducing crypto allocations, and some increased exposure.
• Bitcoin remains the anchor asset for institutional conviction, with ETH and SOL viewed as more conditional and shorter-horizon bets.
• Asked what would trigger selling, institutions pointed to fundamental and credibility risks—not price declines such as regulatory reversals or thesis failure.
• Most allocations for these investors were structured via spot crypto ETFs, or ETF usage was planned; some investors shifted from direct custody or private placements.
• ETH and SOL are being judged on token value accrual, with some institutions willing to exit if network growth does not translate to benefits for token holders.

Hold through drawdowns: what institutions said they would change

Bitwise’s report is grounded in interviews conducted as markets were still adjusting to a decline that started in October 2025. While the report does not name every participant, it describes the types of organizations involved, including endowments, foundations, public pensions, sovereign wealth funds, multi-family offices, investment consultants, and public companies.

One of the most notable findings is what did not drive behavior. When Bitwise asked respondents about potential reasons to sell, none cited falling prices as the deciding factor. Instead, institutions highlighted scenarios such as regulatory reversals, an industry-wide credibility problem, or a clear failure of their investment thesis.

That framing matters because it positions the drawdown not as a near-term test of price tolerance, but as a stress test of whether each institution’s original rationale still holds. Investors that treat crypto exposure as a long-term mandate—rather than a trading position—tend to be less likely to make allocation changes based on volatility alone, and Bitwise’s interview results appear to align with that approach.

BTC at the center; ETH and SOL under a “prove it” standard

The report’s asset-level breakdown reinforces a common pattern in institutional crypto adoption: BTC is the default core, while other networks are evaluated with more scrutiny.

According to Bitwise, every institution that owned crypto held Bitcoin, often as its first, largest, and longest-held position. For many of these organizations, BTC was described as a store of value—frequently compared alongside gold.

By contrast, Bitwise reports that conviction around ETH and SOL varied more. Institutions were less uniform about how long they expected those holdings to remain part of a portfolio. Several respondents told Bitwise they could exit ETH or SOL over the next few years if growth in network activity—such as stablecoins, decentralized finance, and tokenization—failed to translate into value accruing to the tokens themselves.

Bitwise also highlights a specific example from the interview set: one institution that held neither Ether nor Solana had used decentralized finance applications but saw no clear path for that activity to benefit the underlying tokens.

This “token value accrual” focus is important because it clarifies what institutions appear to be underwriting. Rather than treating network usage as sufficient on its own, the interviews suggest investors are looking for more direct economic linkage between adoption and tokenholder outcomes. The next question for market participants is whether ongoing growth in DeFi, tokenization, and stablecoin ecosystems will increasingly be presented in a way that demonstrates measurable benefits for ETH and SOL holders.

ETFs are becoming the default implementation path

Bitwise’s report also sheds light on how institutions are gaining or managing crypto exposure. Among the interviewed organizations with crypto exposure, allocations ranged from 0.5% to 13% of investable assets, with most sitting between 1% and 2%.

Nearly every institution in the sample either used spot crypto exchange-traded funds or planned to. Bitwise further said some investors were shifting from private placements or direct custody toward ETF structures. The shift matters for institutions because it often reduces operational complexity and can align crypto exposure with established portfolio management workflows.

The ETF implementation angle also connects to broader investor positioning trends. CoinShares data published in June, cited by Bitwise, found that professional investors’ reported spot Bitcoin ETF exposure fell by 17% in the first quarter. CoinShares attributed the reduction primarily to hedge funds and brokerages, which accounted for roughly 96% of the decrease, while banks added exposure.

Put together, these details suggest that institutional participation is not simply expanding in a straight line. Instead, exposure can migrate between investor categories and vehicles—sometimes reducing holdings in aggregate for certain groups while increasing for others. For readers, that implies that tracking ETF flows by investor segment may be as important as watching headline totals.

What could trigger selling—beyond market volatility

Perhaps the clearest throughline of the Bitwise interviews is that allocation decisions were tied to durability of the investment rationale rather than to interim price performance. When asked what might prompt selling, respondents referenced three broad categories: regulatory reversal, credibility issues across the crypto industry, and failure of their investment thesis.

In practical terms, this means the “risk calendar” for these institutions is shaped more by policy and structural legitimacy than by day-to-day market moves. Regulatory uncertainty can quickly alter the perceived long-term viability of crypto products, custody frameworks, and market access—so it is unsurprising that institutions prioritize it.

At the same time, the report signals a meaningful split between how investors view BTC versus other major tokens. Even with BTC serving as the anchor asset, ETH and SOL appear to be held with clearer conditions: if token-linked value does not materialize as networks scale, those positions may not survive the next investment review cycles.

Going forward, investors will likely watch two things closely: whether institutional ETF usage continues to deepen across different investor types, and whether Ethereum- and Solana-linked economic models can convincingly demonstrate how growth converts into tokenholder value—since that is the standard several institutions say would determine their next decisions.