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Five years ago, the words “institutions and crypto” seemed like an impossible pair.
Recent trends and events paint a different picture these days. Major banks are offering crypto custody, Bitcoin ETFs are trading significant volume…the whispers are starting to turn into a roar.
Institutional money is flowing into the crypto space like never before.
With that comes some huge benefits and, of course, some potential downsides. What does this mean for holders and investors like you? Well, there’s a lot to unpack.
Don’t worry; we’re here to help.
So, why is this even happening?
Like we touched on at the start, just a few years ago, crypto was laughed out of the room when it came to the big banks and Wall Street players. What changed?
First of all, crypto isn’t a passing trend anymore. It’s established and maturing.
At the beginning of 2020, Bitcoin was trading at a market capitalization of $140 billion* (as mentioned on coinmarketcap.com). In April 2025, it was $1.7 trillion* (also mentioned on coinmarketcap.com).
It’s not just about size, though; it’s about growth.
The industry has matured. These days, you’ll find all kinds of supporting infrastructure for the industry:
Did the institutions come to the light, or were they forced by their clients?
From high-net-worth individuals to large investment groups, these clients are often looking for alternative investments beyond stocks and bonds. Crypto? Well, it sure has been performing well — really well.
They see those outsized returns and want a part of it.
Additionally, some corporations are exploring the crypto space (just check out our Microstrategy, now Strategy, blog). They’re eyeing blockchain tech and its potential for future payment rails, cross-border transactions, or supply chain improvements.
This pressure has pushed the institutions to play nice with the crypto world.
Bitcoin and crypto are known for explosive growth. That and volatility.
Institutions are constantly looking for places to invest. Over the years, the crypto market has shown its potential as a way to not only earn but also diversify.
Why?
Well, crypto and Bitcoin are potentially driven by factors different from traditional markets. While you could certainly make a counterargument here, the debate has given Bitcoin and other assets a reputation as a great way to diversify a portfolio.
Bitcoin, in particular, is often seen as an inflation hedge. Much like other inflation-hedging commodities like gold, it has a limited supply, meaning you can’t just make more.
Inflation, in simple terms, is caused by the printing of more money. This devalues currency, driving inflation.
Bitcoin and other cryptocurrencies don’t have that problem.
As a result, many see it as a way to maintain value during inflationary times. Much like the diversification debate, there are two sides to this argument.
Another driver of Bitcoin’s institutional adoption is the clarification of regulations.
To say the last few years have been confusing for the crypto industry is a bit of an understatement. This was yet another reason why major institutions had cold feet when it came to Bitcoin.
But that was then. These days, the regulatory world is a lot more welcoming to crypto. First came spot Bitcoin ETFs (which we’ll explain a little later). Then, there was the election of a very crypto-friendly presidential administration. Things are still pretty new, but there’s no doubt it’s night and day when compared to the past in regard to how crypto will be regulated.
The financial services industry is hyper-competitive.
When influential players like BlackRock, Fidelity, or major investment banks launch crypto products, competitors feel the pressure to respond.
To stay competitive, institutions now need to offer crypto options or their clients might move to a competitor who will. In the crypto world, we call this FOMO, or the “Fear of Missing Out.” Institutions want to establish a foothold, build expertise, and capture market share early, even if their initial involvement is cautious.
It's about staying relevant in an evolving financial landscape.
Another huge factor driving the story of Bitcoin and institutions is the ETFs, or exchange-traded funds. We published a whole blog on spot Bitcoin ETFs, so be sure to check that out.
In short, ETFs allowed people to buy Bitcoin on the stock exchange.
The world of Bitcoin operates a bit differently than traditional markets. Many institutions, and even everyday investors, don’t have the patience or the willingness to learn how Bitcoin works and how to keep their coins safe.
ETFs brought these barriers down.
Additionally, there’s a whole ecosystem of institutional-grade custody. By this, we mean companies willing to hold onto a large amount of Bitcoin for institutional players. If you’re looking to buy millions in Bitcoin, these are usually your best two options.
This has opened up the chance for major corporations and businesses to build their own Bitcoin treasury strategies.
We discussed MicroStrategy earlier, but there are dozens of companies* (see the companies holding Bitcoin at coingecko.com) out there with public Bitcoin holdings. Here at Bitcoin Depot, we have our own Bitcoin treasury.
So what does this all mean for you?
Here’s the good news:
For many Bitcoin holders, this new era is a breath of fresh air. It’s not just a niche hobby anymore; crypto is big business. With the doors wide open thanks to the ETFs, even your grandparents can add some coins to their retirement accounts.
Of course, when the institutions come to play, there are downsides.
The first is that big buys and sells can tilt the market. While it’s true that as Bitcoin grows, these moves don’t make much of a splash, there’s no denying that these price swings can catch smaller investors off guard.
There’s also the elephant in the room.
Bitcoin wasn’t exactly built for institutional adoption and big banks. It was built for everyday users. It’s decentralized, peer-to-peer, and censorship resistant — the opposite of what the institutions bring to the table.
It kind of goes against the main ethos of Bitcoin and crypto as a whole.
Even so, there’s no putting the cork back in this bottle. Love them or hate them, institutions are here to stay.
So there you have it: the story of institutions and crypto.
To recap, they’re here, and for a variety of reasons. The main one being that they had no choice. Bitcoin is only growing in popularity. It was a matter of changing or getting left behind. While this has some great benefits for users and holders like you, it’s not without its downsides.
As we mentioned before, it’s putting many would-be adopters into a unique position.
When institutions purchase through an ETF or their clients buy and hold through a large custodian, they don’t really own their Bitcoin.
That’s the exact opposite of what we do here at Bitcoin Depot.
Our mission is simple: bring Bitcoin to the masses. That means direct ownership of your coins. When you purchase from one of our Bitcoin ATMs, that Bitcoin goes right into your wallet. It’s yours, not a bank’s or an exchange’s.
Ready to get started? Find your local Bitcoin ATM here.
*The information provided above is for informational purposes only. The inclusion of any particular 3rd party site does not imply an endorsement, sponsorship, or partnership between Bitcoin Depot and the 3rd parties listed above. While Bitcoin Depot endeavors to ensure the accuracy and relevance of the information provided, we do not guarantee the reliability of any 3rd party’s information.