Bitwise: Institutions Held Onto Crypto Through a 50% Drawdown

None of the 15 institutions interviewed by asset manager Bitwise cut their crypto allocations during a roughly 50% market drawdown, and several even bought more. The survey captures how professional investors behaved in the middle of a decline that began in October 2025.

Bitwise conducted the interviews in late March and April, while the market had not yet recovered from the pullback. The results suggest that for large investors, crypto has become part of a long-term strategy rather than a speculative bet dumped at the first red day.

The Bitwise report arrives almost two years after the first spot Bitcoin ETFs launched in the US in January 2024. Those funds gave conservative institutions a simpler path into an asset that previously required separate custody infrastructure and legal sign-off.

Who Took Part in the Bitwise Survey

The sample included investment professionals from endowments, foundations, public pensions, sovereign wealth funds, multi-family offices, investment consultants and public companies. These are typically conservative allocators who traditionally avoid high-volatility assets.

For nearly everyone who held Bitcoin, it was their first, largest and longest-held crypto asset. Most institutions treat Bitcoin as a store of value, often alongside gold, rather than a tool for short-term trading.

The fact that these particular types of institutions held their positions through the downturn matters for the rest of the market. Endowments, pension funds and sovereign wealth funds traditionally set the benchmark for more conservative managers who join the asset class later.

Ethereum and Solana look different in these portfolios. They are smaller bets with a shorter time horizon and clear conditions for selling. That reflects a difference in how institutions weigh risk: they treat Bitcoin as an established macro asset, while the other tokens are more of a bet on a specific technology's growth.

Why Institutions Don't Panic During Drawdowns

Asked what could prompt them to sell, none of the respondents cited falling prices. Instead, participants pointed to other scenarios.

• A regulatory reversal in key jurisdictions that makes holding the asset too risky or costly.
• An industry-wide credibility crisis similar to those that followed past major exchange collapses.
• A failure of the original investment thesis, when the asset stops serving the role it was bought for.

Some participants said they would be ready to exit Ethereum or Solana if growth in adjacent areas, such as stablecoins, DeFi and tokenization, failed to translate into value for the tokens themselves. One institution that used DeFi applications extensively held neither ETH nor SOL, since it saw no clear link between that activity and a benefit for token holders.

How Much Crypto Sits in These Portfolios

Among those with exposure to the asset class, crypto allocations ranged from 0.5% to 13% of the investment portfolio, though most fell between 1% and 2%. Even that modest share translates into meaningful sums in absolute terms for funds managing tens or hundreds of billions of dollars in assets.

According to Bitwise, almost every institution surveyed already uses spot crypto ETFs or plans to, gradually shifting from private placements and direct custody toward funds. That shift cuts operational overhead. A fund no longer has to manage cold wallets or custody agreements on its own, and the capital flows through regulated exchange infrastructure instead of private wallets or over-the-counter deals.

Behavior differs by investor type, though. A CoinShares report based on 13F filings, published in June, found that professional investors' reported exposure to US spot Bitcoin ETFs fell 17% in the first quarter. Hedge funds and brokerages accounted for about 96% of that reduction, while banks added to their positions instead.

Institutional Crypto, by the Numbers

The table below combines the key figures from both reports, which together describe how large investors behave during volatility.

The gap between the two reports is telling. Bitwise surveyed mostly long-term allocators, while the CoinShares 13F data covers a broader set of asset managers that includes far more tactical traders.

What This Means for the Market

The main takeaway from the Bitwise report is simple. For long-term institutional players, price alone is not a trigger to sell. The deciding factors remain the regulatory environment, the industry's reputation, and whether the asset still fits the original investment thesis.

That lines up with a shift of capital away from hedge funds and brokerages, which trade more actively on short-term swings, toward longer-term holders such as banks and endowments. For the market, that points to a steadier base of demand, one that reacts less to daily price swings and more to structural shifts in regulation or technology.

For retail investors, there's a practical takeaway here. If large conservative players aren't panicking over a 50% drawdown, a sharp daily price swing alone is unlikely to be reason enough for a rushed decision.