Institutional Crypto's ETP Boom: Foundational Infrastructure Overtakes Venture Capital Amid Regulatory Clarity

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Institutional Crypto's ETP Boom: Foundational Infrastructure Overtakes Venture Capital Amid Regulatory Clarity

Bitget-RWA2025/11/25 17:10

By:Bitget-RWA

- Institutional crypto adoption accelerates as pension funds and hedge funds shift capital to regulated ETPs and digital treasury services, bypassing traditional VC funding. - U.S. dominance in institutional crypto grows (47% Q3 2025 VC funding), driven by emerging legislation and corporate giants like Microsoft/BlackRock investing in Bitcoin mining. - Blockchain-AI convergence boosts institutional infrastructure, with Ethereum staking, DeFi yield platforms, and token security APIs (717M monthly calls) add

The institutional crypto sector is experiencing significant changes as prime brokers and settlement services evolve to meet increasing interest from pension funds, hedge funds, and corporate treasuries. As regulatory frameworks become clearer in the U.S. and Asia, companies focused on crypto asset management, derivatives, and blockchain solutions are establishing themselves as essential infrastructure for institutional players.

Institutional Crypto's ETP Boom: Foundational Infrastructure Overtakes Venture Capital Amid Regulatory Clarity image 0

Spot exchange-traded products (ETPs) and digital asset treasury offerings have emerged as primary gateways for institutional funds, shifting attention away from traditional venture capital investment in the crypto industry.

Galaxy Digital

observed that major allocations to Bitcoin ETPs

by pension and hedge funds reflect a preference for liquid, regulated investment vehicles over early-stage venture capital opportunities. This movement coincides with more companies, such as Microsoft and

BlackRock

joining a

$40B AI-driven data center initiative

that also involves

Bitcoin

mining activities, allocating resources from their balance sheets.

The United States remains at the forefront of institutional crypto engagement, with

47% of Q3 2025 venture capital investment

directed toward U.S. companies. Experts link this to the approval of the GENIUS Act and the prospect of new crypto market regulations under a Trump presidency, which may encourage established financial institutions to participate. "The U.S. has traditionally led in both deal volume and capital, and this momentum is expected to grow," a Galaxy Digital spokesperson commented.

Institutional services are increasingly integrating blockchain and AI, with

companies like Yiren Digital reporting a 204% quarter-over-quarter increase

in online insurance premiums while piloting

Ethereum

staking products. At the same time,

Solana-based treasury platforms, including Forward Industries and Upexi

, now collectively manage assets exceeding $3 billion in

SOL

, utilizing decentralized finance (DeFi) to provide returns for institutional investors.

South Korean crypto exchange Upbit is gearing up for a Nasdaq listing after merging with Naver Financial, marking a milestone of institutional acceptance for crypto trading venues

as more crypto companies pursue public listings

. This mirrors a broader movement of crypto firms entering public markets, with Kraken and Gemini already listed and MicroStrategy (MSTR) continuing its efforts to remain in the S&P 500.

While the outlook is positive, challenges persist.

Elevated interest rates and competition from AI-focused startups

are still affecting venture capital flows, and central banks remain cautious about stablecoin risks. Nevertheless,

companies specializing in token security APIs, such as GoPlus

are experiencing strong demand, with their Token Security API handling 717 million monthly requests in 2025.

---

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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