A recent study by EY and Coinbase, the “2025 Institutional Investor Digital Assets Survey: Increasing Allocation in a Maturing Market”, found investors enthusiastic about digital assets. The top three reasons respondents cited for investing in them: higher returns than other asset classes, investment in innovative technology and a hedge against inflation.
Family office and hedge funds were more likely than other respondents to say they are planning to significantly increase their allocation to cryptocurrencies, digital assets or related products in 2025, with 25% planning to do so compared with an average of 12% among other firm types. While the data suggests that family offices showed comparatively lower interest in investing in tokenized assets — with 24% indicating no interest versus 8% overall — it’s worth noting the sample size for family offices was small (25 out of 352 respondents).
Mike Johnson, EY Americas financial services solutions leader for digital assets and tax, discusses how family offices are approaching the digital asset market:
What are digital assets?
When we use the term ‘digital assets,’ I think a lot of people will inevitably say, ‘Oh, we’re talking about cryptocurrency.’ But it’s much broader than that. Cryptocurrencies — bitcoin, Ethereum, other alt coins — have been the main focal point. But as the blockchain technology and the underlying cryptography that goes along with it advance, it’s allowing for transformation across finance: how we make payments, how we fractionalize assets to be able to invest. Cryptocurrencies will continue to be a part of the ecosystem. But as you look at digital assets as a whole, it’s really opening up the opportunity to leverage the technology and the innovation to become part of the financial products that we use.
How can these technological advances transform the investment landscape?
Some of our key findings stem from some of the emerging tokenized assets.
There have been barriers that have restricted alternative investments: In a lot of the different alts, for example, you have to have minimum investments. Tokenization allows for that access barrier to be reduced or removed, so it opens up the ability to diversify your portfolio. It’s really about market access for everyone — this decentralized concept of blockchain starts to open up opportunities for more people to have investment assets and types that they’ve never had access to in the past.
Family offices may have already had the profile to make these types of investments, but some methods of getting into these investments may have had partnership structures or some type of co-invest opportunity. Tokenized assets may allow more ways to get into these asset classes, with easier entries and exits.
What sort of interest are you seeing from family offices?
I think family offices are growing in their acceptance of digital assets — the more familiar they get with it, the more opportunity they’re seeing in it.
We’re seeing interest from family offices in how they can use cryptocurrencies or digital assets to get better portfolio diversification and yield. But they want to see certain things: regulatory guidance, the maturing of the market around it. The survey found exactly what you would expect, which is interest, opportunity, and some level of trepidation.
What is needed for the market to mature?
We need clear sets of rules.
Historically, there were parts of this space that did not fit into the regulatory structure. Traditional financial institutions were highly regulated, with SEC regulations, FDIC preclearance requirements and other agencies that had restricted their ability to build a digital asset product. A few traditional finance institutions did work through the process and have been early movers in this space.
President Trump signed executive orders aimed at supporting broader engagement with digital assets.
The second thing that’s been happening is they’re encouraging Congress to address it through legislation.
There’s a proposed stablecoin bill in legislation right now that would help establish what a stablecoin is, how it’s monitored, how it needs to have reserves. There’s a market structure bill that would help address how digital assets as a whole are managed, who the regulator is. Getting more digital asset-friendly regulations from Washington, I think, will help move this technology toward a more mature, embedded market.
Since we have removed some of the restrictive regulations, and as we move to add clarity through legislation and then further regulatory guidance, I think that we’re going to see more supply come in to try to meet that demand.
How are digital assets treated for tax purposes?
We need not just regulatory clarity, but also tax clarity. There are a lot of questions around taxes and digital assets. For example, how is staking revenue, which is essentially interest earned off of cryptocurrencies, treated? How do you keep track of the tax basis on a digital asset, especially as it moves through different wallets and transactions?
These questions have an impact on investment decisions, as well, and they are being addressed in D.C.
What do family offices need to think about when investing in digital assets?
After you make the decision to be invested, you need to ask, what infrastructure do I need, or what institution do I need to work with in order to meet the objectives that I have for my strategy?
There are a number of questions: How do you custody them? It’s not like you can put it in a bank vault. It’s a digital asset. So what wallets are you using? Do you want to do cold storage, which is a term they use for taking it offline so it’s not connected to the Internet? Do you want to self-custody?
