đ Institutions Now Dominate Crypto â Retail Has Stepped Back (Polygon Executive)
Crypto in 2025 has entered a new phase: institutional capital is now driving the market. According to Aishwary Gupta (Head of Payments & RWA at Polygon Labs), institutions currently make up around 95% of all crypto inflows, while retail activity has fallen to roughly 5â6%.
Major firms like BlackRock, Apollo and Hamilton Lane are allocating 1â2% of portfolios to crypto, launching ETFs and testing tokenized investment products. Gupta said traditional finance is entering crypto not because sentiment changed, but because the infrastructure is finally ready â scalable chains, compliance rails and real-world use cases.
He highlighted examples such as DeFi experiments with JPMorgan, Ondo tokenized treasuries and regulated staking with AMINA Bank â showing that public blockchains are capable of supporting institutional-grade operations.
Retail activity declined after meme-coin losses and unrealistic expectations, but Gupta believes this is temporary and structured products will eventually bring them back.
He also addressed decentralization concerns, saying institutional adoption wonât âcentralize cryptoâ as long as systems remain open public blockchains â instead, it will legitimize and expand the ecosystem.
Gupta says the new cycle is not hype-driven retail speculation, but long-term, yield-focused institutional participation, which should gradually lower volatility and push crypto toward being viewed as financial infrastructure rather than just an asset class.
Going forward, he expects major growth in: âą tokenized RWAs
âą institutional staking
âą compliance-ready yield products
âą interoperability across public chains
The next phase, Gupta says, is traditional finance operating directly on chain, merging infrastructures rather than replacing them.
