A recent survey conducted by Bank of America (BofA) among 211 global fund managers overseeing $504 billion in assets showed that institutional investors are still largely absent from the cryptocurrency market. The majority of these managers focus on traditional assets, while their allocations to cryptocurrencies remain very minimal.
According to the survey, 97% of participants reported that their portfolios do not contain cryptocurrencies. Among the small percentage that hold these assets, the average allocation was around 32% of their portfolios, which translates to just 0.3% when averaging across all participants.
ETF analyst Eric Balchunas commented on the survey results, saying that many of these institutional managers may lack vision, citing their previous poor estimates when selling U.S. assets in the first quarter of 2025, a time that later saw a recovery in U.S. markets. Balchunas jokingly added, "Aren't these the same managers who advised selling America in the first quarter? Perhaps they should start listening to those who achieve better returns."
This institutional caution comes despite the fact that the adoption of cryptocurrencies has started to gain momentum, such as the addition of Bitcoin investment options for some U.S. retirement plans (401k) for savers. However, still only 9% of fund managers have structurally allocated to cryptocurrencies, reflecting Wall Street's cautious stance.
On another note, optimism regarding global stocks has increased, with a net 14% of portfolio managers 'overweight' in stocks compared to just 2% in the previous month, while allocations to emerging markets rose to the highest level since early 2023, while U.S. stocks remained underweight due to concerns about high valuations.
The survey also showed that 41% of participants expect weak global growth over the next year, compared to 31% in July, and concerns about inflation rose to 18% versus 6% in the previous month. Cash levels remained steady at 3.9%, slightly below the 4% that typically indicates a sell signal for U.S. stocks.
Among the major risks identified by participants, a global recession due to trade wars accounted for 29%, inflation that could limit Federal Reserve cuts accounted for 20%, and irregular bond yield increases also accounted for 20%.
While the focus remains on stocks and bonds, cryptocurrencies continue to wait for entry into institutional portfolios. Experts like Ryan Rasmussen, head of research at Bitwise Invest, suggest that managers may soon have to reconsider their meager 3.2% allocations.
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