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

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.

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. 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 joining a that also involves mining activities, allocating resources from their balance sheets.

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

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

in online insurance premiums while piloting staking products. At the same time, , now collectively manage assets exceeding $3 billion in , 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

. 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.

are still affecting venture capital flows, and central banks remain cautious about stablecoin risks. Nevertheless, are experiencing strong demand, with their Token Security API handling 717 million monthly requests in 2025.

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