Crypto’s Mainstream Embrace Reshapes Global Infrastructure Investment
The world of high finance is fast converging with the once-fringe realm of cryptocurrency, and the ripple effects are poised to transform how major projects are financed. Traditional financial institutions – from Wall Street banks to European asset managers – are going big on digital assets, launching new crypto-focused funds and positioning Bitcoin and its peers as core holdings.
This institutional pivot towards crypto comes amid growing consensus that digital assets could outperform other asset classes on a risk-adjusted basis, a dramatic perception shift few could have imagined a decade ago. As big money warms to crypto, construction industry leaders and infrastructure investors are starting to ask what this means for the future of project finance.
In an era when blockchain technology is already streamlining construction contracts and supply chains, digital assets now also promise to inject fresh capital into the infrastructure investment pipeline.
Traditional Finance Dives Into Crypto Funds
In a sign of the times, nearly all institutional investors and wealth managers surveyed globally expect more traditional financial firms to launch crypto investment funds in the near future. A new global study by Nickel Digital Asset Management – a London-based firm run by veterans of Bankers Trust, Goldman Sachs and JPMorgan – found 43% of respondents predict a “dramatic increase” in large traditional institutions rolling out digital asset funds over the next two years, with a further 53% anticipating a steady increase. In other words, almost no one sees the institutional crypto trend slowing; roughly three-quarters even expect an uptick in digital asset fund launches just in the coming year. Practically none of those polled foresee a decline in new crypto offerings.
This surge is already underway. In the past year, household-name asset managers have set their sights on crypto, seeking to bridge the gap between old money and new assets. A key catalyst often cited is BlackRock’s pioneering move to tokenise a money market fund on a blockchain – the fund (codenamed “BUIDL”) launched in March with a stable $1 per token structure and has quickly grown to about $500 million in assets. Institutional investors have watched BUIDL’s experiment closely; 95% of those surveyed believe BlackRock’s fund will swell to around $10 billion by the end of 2025, underscoring expectations that tokenized funds can scale rapidly. Success stories like this are opening the floodgates. Over the next three years, 93% of institutional players expect a continued rise in the number of traditional firms launching digital asset funds, and more than a third foresee an especially sharp acceleration in such launches.
The entry of major banks, asset managers and even pension funds into crypto is broadly welcomed by existing crypto investors. Nickel’s research shows an overwhelming 92% of institutional crypto investors view greater involvement from big traditional finance firms as a positive development, with 18% calling it “very positive”. The reasoning is straightforward: heavyweight institutions bring credibility, robust infrastructure, and stringent risk management to a sector that, until recently, was often dismissed as a Wild West.
Their presence could attract more conservative investors off the side-lines and boost liquidity and stability in crypto markets. Indeed, “traditional finance firms are already making significant strides into the digital assets space, and that is only predicted to increase over the next two years”, said Anatoly Crachilov, CEO and Founding Partner at Nickel Digital Asset Management. “The views of institutional investors and wealth managers on the ability of crypto to deliver attractive risk-adjusted returns helps to explain why that is the case, and why professional investors increasingly expect crypto to be part of institutional investors’ portfolio allocation.”
Evidence of this mainstream embrace is visible in the market itself. After a volatile 2022, crypto asset values rebounded strongly, adding roughly $1 trillion in market capitalization over the past year. As of mid-2025 the total crypto market is estimated around $3.3 trillion, up 43% year-on-year, thanks in part to strong institutional inflows and new investment vehicles. Bitcoin – long derided by banks as “magic internet money” – now finds Wall Street titans racing to secure their share of the digital gold rush.
In fact, U.S. regulators recently green-lit the first spot Bitcoin exchange-traded funds (ETFs), prompting record-breaking inflows from asset managers like BlackRock and Fidelity. In one late-June trading day, BlackRock’s crypto fund reportedly snapped up over 4,100 BTC (around $436 million worth) while Fidelity bought 805 BTC ($85 million) – in a single day. By summer 2025, BlackRock’s spot Bitcoin trust held roughly 683,000 BTC (over $70 billion worth) on behalf of clients, an astonishing accumulation that rivals the legendary Bitcoin stash of MicroStrategy.
Such massive bets by the world’s largest money managers were unthinkable just a few years ago. Now they underscore how institutional participation has become a dominant force in crypto markets, lending an air of legitimacy and a “steady bid” that is helping to support prices. In short, big money is pouring into crypto, creating a feedback loop: positive returns attract more institutional interest, which begets more inflows and product launches, further boosting performance. This marks a fundamental shift from the retail-driven manias of the past toward a more balanced market driven by long-term investors.
Crypto Tipped as a Top Performer
What’s driving this gold rush mentality among traditionally cautious institutions? A major factor is the belief that crypto can deliver superior returns on a risk-adjusted basis relative to other investments. In Nickel’s survey, fully two-thirds of institutional investors and wealth managers (66%) placed cryptocurrency among their top five asset classes for attractive risk-adjusted returns over the next five years, making it the most frequently cited asset class.
For context, respondents ranked crypto ahead of private equity, equities and other stalwarts of investment portfolios. Below is how the assets stacked up in the study when investors were asked which offer the best prospects for attractive returns relative to risk:
- Cryptocurrency – 66% of respondents
- Private equity – 64%
- Emerging market equities – 61%
- Commodities – 50%
- Real estate – 47%
- Investment-grade corporate debt (Europe) – 47%
- U.S. equities – 42%
- U.S. investment-grade debt – 42%
- European equities – 36%
- Gold – 4%
It’s eye-opening that digital assets are perceived to have better risk/reward potential than venerable asset classes like real estate or investment-grade bonds.
Traditionally, long-term infrastructure and property investments have been prized for steady, inflation-linked yields and low volatility. Yet here, crypto tops the table while even gold – often considered the ultimate safe haven – garnered a meagre 4% vote. This suggests a profound shift in mindset. Professional investors increasingly see crypto as more than a speculative bet; they view it as a viable component of a diversified portfolio, capable of delivering strong returns without outsized risk (at least when managed properly). The maturation of the crypto market likely plays a role in this sentiment.
Over the past few years, the crypto sector has seen improved liquidity, the emergence of regulated derivatives, and better custody solutions, all of which help mitigate risk and tame volatility. Moreover, the outsized performance of top digital assets cannot be ignored – even accounting for wild swings, long-term holders of Bitcoin or Ethereum have enjoyed tremendous gains, giving crypto an attractive Sharpe ratio in hindsight.
Institutional optimism is further buoyed by macroeconomic considerations. With interest rates in flux and inflation eroding returns on cash, investors are hungry for alternative assets that can act as an inflation hedge or yield enhancer. Crypto, once dismissed by CIOs as too volatile, is now getting a second look as a kind of digital gold or venture-like allocation.
“Rising debt levels and inflation have provided a catalyst for the crypto rally… it appears investors are looking for alternative asset classes that act as a debasement hedge and a reliable store of value,” observed Kunal Bhasin, co-leader of KPMG’s Digital Assets practice, after a 2023 survey of Canadian institutions. The events of 2022 – including the high-profile collapse of some crypto firms – ironically may have strengthened this conviction by shaking out weaker players. Bhasin noted that the prior year’s turbulence “had a cleansing effect on the industry”, leaving a more robust ecosystem and paving the way for serious investors to step back in. In short, crypto is increasingly seen as an investable asset class in its own right, not just a casino chip. This overdue respect is feeding predictions that digital assets will hold their own – even outperform – in diversified portfolios alongside private equity, equities, and other growth assets.
From Niche to Necessity
Perhaps the strongest signal of crypto’s newfound stature is how commonplace it’s expected to become in institutional portfolios. Three out of four institutional investors (75%) surveyed believe that cryptocurrencies will form part of mainstream portfolio allocations within five years. In other words, by 2030, digital assets could be as ubiquitous in pension and endowment fund portfolios as emerging market stocks or real estate allocations are today. This marks a striking change from just a few years ago, when many institutional investors had zero exposure to crypto and some fiduciaries questioned whether holding Bitcoin was even permissible. Now, not only is crypto exposure considered acceptable, it’s increasingly viewed as inevitable.
This optimism is backed by recent trends. Nickel’s research covered institutional participants across the US, UK, Europe, Asia, the Middle East and Latin America – collectively managing over $1 trillion – indicating the shift is truly global in scope. Already, nearly 9 in 10 of those investors plan to increase their digital asset allocations in 2025, building on the momentum from 2024. Many large investor groups are moving from dipping a toe in crypto toward a more strategic commitment. Around 70% expect large pension funds to significantly increase crypto exposure in the next two years, and a majority say the same for wealth managers and family offices.
Current allocations, while still modest, are set to balloon. As of now, about 43% of institutions in Nickel’s study have at least 2% of their assets in digital assets. But within just three years, an astonishing 92% of those surveyed anticipate having 2% or more of their portfolios allocated to crypto. A 2% allocation might sound small, but in the context of a multi-billion-dollar pension fund, it is significant – and the psychological shift of carving out even a slice of the pie for crypto is profound. Some forward-looking institutions have already crossed bigger thresholds: KPMG found one-third of Canadian institutional investors had 10% or more of their portfolio in crypto or related investments by 2023. Clearly, the narrative is no longer “will institutional investors invest in crypto?” but rather “how much, and how soon?”
Several factors are accelerating this normalization. For one, regulatory clarity is improving in key markets. Countries like Canada and Switzerland approved the first Bitcoin ETFs and ETPs, providing secure, regulated channels for exposure. Major banks have launched crypto custody and trading services, addressing prior security and compliance concerns.
As infrastructure for crypto trading and custody starts to resemble that of traditional assets, institutional comfort levels rise. Additionally, the line between traditional and crypto finance is blurring – many crypto investment firms are now run by Wall Street alumni (Nickel itself is a prime example), and they speak the same language of compliance, risk management and fiduciary duty. This makes it easier for institutional allocators to trust crypto funds with their capital.
Lastly, client demand is growing: financial advisors report that high-net-worth individuals and even retirees are inquiring about crypto investments as they hear more success stories. Wealth managers, in turn, don’t want to be left without an answer. In 2021, only half of financial firms in Canada saw client demand for crypto; by 2023 that jumped to 80%. Globally, a generational wealth transfer is underway, and younger investors are far more crypto-friendly – a trend not lost on institutional strategists eyeing the long game.
To be sure, not everyone is all-in on crypto yet. Some conservative institutions remain on the side-lines, citing volatility, regulatory uncertainties or ESG concerns (Bitcoin’s carbon footprint continues to be debated). But the direction of travel is clear: digital assets are moving from the periphery to the mainstream of investment management. As this happens, the question for many organizations is shifting from “Why invest in crypto?” to “How do we integrate crypto into our strategies?”
How Institutions Are Gaining Exposure
As traditional investors tiptoe (or charge headlong) into crypto, what forms are these investments taking? The Nickel study sheds light on preferred strategies for accessing the digital asset space. Interestingly, actively managed, diversified crypto funds are the top choice. Rather than simply buying Bitcoin and Ether and calling it a day, institutions show a preference for professional fund managers who can navigate the complexities of this emerging market.
According to the research, the most favoured approach is actively managed diversified long-only portfolios focusing on digital assets. These are funds that take long positions across a basket of cryptocurrencies (and possibly related equities), aiming to capture broad upside while managing downside risk through diversification and perhaps tactical moves. Hot on its heels, the second choice is actively managed diversified long-short portfolios, i.e. hedge funds that go long on promising assets and short overvalued ones, profiting from market dislocations in both directions. The fact that long-short strategies rank highly indicates institutions appreciate the high volatility in crypto can also be a source of alpha – skilled managers can short-sell or hedge during downturns, potentially smoothing returns.
The third preference is passive diversified portfolios, meaning index-tracking funds or baskets that simply mirror the crypto market or a segment of it. While lower on the list, passive vehicles still appeal to many as a low-cost way to get broad exposure without making big bets on single coins. Indeed, the proliferation of crypto exchange-traded products (ETFs and ETPs) in Europe and elsewhere has made passive exposure much easier. However, perhaps due to the market’s inefficiencies, many institutions seem to trust active management to add value in crypto – a stark contrast to traditional equities where passive index investing has dominated flows in recent years.
More specialized strategies follow in popularity. Arbitrage-focused hedge funds – which seek to exploit pricing inefficiencies across exchanges and between asset pairs – are another way institutions are dipping their toes. Crypto markets, being relatively young and fragmented, offer ample arbitrage opportunities (such as price gaps between exchanges, futures vs spot discrepancies, etc.), and funds that capitalize on these can deliver steady, low-risk returns uncorrelated to market direction. Such market-neutral crypto funds have attracted interest as a way to earn yield in the space without making a directional bet.
Lastly, crypto exchange-traded funds and notes (ETFs/ETPs) are also in the mix, and while they rank a bit lower in preference according to Nickel’s survey, they remain an important gateway – especially in jurisdictions where direct crypto fund investment is constrained. As the universe of crypto ETFs expands (with products now covering not just Bitcoin and Ethereum but baskets of DeFi tokens, Metaverse assets, and more), institutions have more choice than ever to get exposure in regulated wrappers.
In summary, the menu of options for institutional crypto exposure has grown from a sparse few items to a full buffet:
- Active diversified funds (long-only) – Professional managers investing across a range of digital assets for growth.
- Active diversified funds (long-short) – Hedge funds taking long and short positions to profit in both bull and bear markets.
- Passive index funds or ETPs – Broad market exposure through index-tracking instruments or exchange-traded funds.
- Arbitrage and market-neutral funds – Strategies exploiting pricing inefficiencies, aiming for consistent low-volatility returns.
- Direct holdings & trusts – (Still used by some) Direct purchase of cryptocurrencies or shares in trusts like Grayscale’s, especially where other vehicles are unavailable.
The preference for active management reflects a cautious optimism: institutions are willing to embrace crypto’s potential, but they often prefer to hire experts to manage the complexities rather than go it alone. Crypto markets trade 24/7, have unique technological risks (custody of private keys, smart contract bugs, etc.), and can whip around on regulatory news – conditions where having seasoned managers or dedicated teams monitoring positions is a comfort.
As Anatoly Crachilov noted, many professional investors see active crypto funds as a way to “remove existing complexities and inefficiencies” in accessing this market, letting them partake in upside without wrestling with the technical minutiae. Meanwhile, for those who do want passive exposure, the continued rollout of ETFs and structured products is making it ever simpler to plug crypto into a portfolio’s asset allocation.
Implications for Infrastructure and Project Finance
For leaders in the construction and infrastructure sectors, the billion-dollar question is how this institutional rush into crypto might affect traditional infrastructure investment and the funding of major projects. At first glance, cryptocurrencies and concrete seem worlds apart – one is the epitome of digital finance, the other the realm of steel and stone. Yet, the two are converging in surprising ways, opening new opportunities to raise capital for infrastructure development.
One immediate implication is competition (and complementarity) in asset allocations. Infrastructure has long been a favoured asset class for institutional investors like pension funds, thanks to its stable cash flows and inflation-linked returns. However, if crypto is now viewed as offering superior risk-adjusted returns, could it steal some thunder (and dollars) from infrastructure funds? It’s possible that some capital which might have gone into infrastructure debt or equity could be diverted into crypto assets in the hunt for higher yields. For instance, an institution might trim a point or two from its real estate or infrastructure allocation to free up room for a bitcoin or digital asset fund. Over time, if digital assets consistently outperform, infrastructure projects might face stiffer competition for investment dollars, especially from the more return-driven investors.
On the flip side, crypto’s rise could also benefit infrastructure financing by unlocking new sources of capital. Booming crypto markets have created vast pools of wealth, and increasingly that wealth is seeking tangible investments – including property and infrastructure – to diversify into. During crypto bull runs, it’s not uncommon to see investors reallocate some gains into real assets. For example, the government of El Salvador, buoyed by crypto enthusiasm, announced plans to fund an ambitious “Bitcoin City” development via a $1 billion Bitcoin-backed “Volcano Bond” – effectively tapping crypto investors to finance infrastructure like power and transport for a brand-new city. While novel, this plan illustrates the potential: large crypto holdings can be redirected into construction projects, especially when traditional funding is scarce. Similarly, private real estate developers have begun experimenting with raising capital through token sales and initial coin offerings (ICOs), selling fractional stakes in projects to crypto investors worldwide. By tapping into the global crypto community, developers of everything from housing estates to renewable energy plants can access a much broader investor base than the usual roster of banks and infrastructure funds.
The tokenization of infrastructure assets is another game-changer on the horizon. Tokenization refers to issuing digital tokens on a blockchain that represent ownership shares in an asset – be it a building, a toll road, or a wind farm. This concept can democratize and globalize project finance. Instead of a mega-project being funded by a few institutional lenders, tokenization allows thousands of investors around the world, big and small, to collectively fund the project by purchasing tokens. These tokens can then be traded on secondary markets, providing liquidity that traditional infrastructure equity lacks. Imagine being able to buy or sell a slice of a toll road project as easily as trading a stock – tokenization promises exactly that level of flexibility. This liquidity makes infrastructure more attractive to investors who otherwise might balk at the decades-long lock-in. It could draw in not just crypto enthusiasts but also large institutions that previously avoided infrastructure due to its illiquidity. More participation means more capital available to build the roads, bridges, and power plants the world needs.
We’re already seeing early steps in this direction. In Hong Kong, the government successfully issued a tokenized green bond (Project Evergreen) in 2023, proving that sovereign infrastructure funding can occur on blockchain rails. The European Investment Bank likewise issued its first digital bond on Ethereum, raising funds for public projects via a blockchain-based bond in 2023. These high-profile pilot projects show that tokenized infrastructure finance is not science fiction – it’s happening. And private sector initiatives abound: real estate tokenization platforms have enabled fractional ownership of buildings, and start-ups are exploring tokens tied to revenue streams of infrastructure like solar farms or broadband networks.
For construction firms and project developers, this means new avenues to raise money. Infrastructure developers might soon pitch projects not only to banks and governments, but also directly to communities of crypto investors, packaging projects into tokens or coins. Such fundraising could be faster and potentially cheaper, by cutting out intermediaries and tapping into a tech-savvy investor pool that’s hungry for yield and impact. Tokenization could also increase transparency – every transaction can be recorded on-chain, so investors can see exactly where funds move, reducing concerns about misuse.
There are tangible examples already making waves. In the Middle East, luxury property developers in Dubai have started accepting cryptocurrency for real estate purchases, courting overseas crypto millionaires to invest in local projects. In the UK, the first homes have been sold directly for Bitcoin, signalling growing acceptance of digital currency in property transactions. And in emerging markets facing volatile currencies, some governments see digital assets as a way to attract foreign investment into infrastructure by offering tokens that sidestep local currency risk. Crypto-collateralized loans are even being considered for development projects – for instance, using Bitcoin holdings as collateral to borrow funds for construction, providing lenders additional security and a hedge against local inflation.
Of course, these innovations come with new challenges and risks. Regulatory frameworks for tokenized securities and cross-border crypto investments are still catching up. Infrastructure tokens often blur the line between securities and crowdfunding, raising legal questions; issuers must ensure compliance with securities laws to protect investors and themselves. There are also technical risks – smart contracts need to be secure to prevent hacks that could jeopardize funds. And market volatility means the value of tokens could fluctuate in ways unrelated to project fundamentals, potentially complicating financing plans. Yet, despite these hurdles, the potential benefits are too significant to ignore. As one infrastructure tokenization expert put it: tokenization is about “creating a more efficient and dynamic market for infrastructure…leading to better projects, more jobs, and a stronger economy. It’s a big deal.”
For policymakers and industry investors, the rise of digital assets might actually come as a well-timed boon. The global infrastructure financing gap – the shortfall between needed investment and available funding – runs into the trillions of dollars over the next decade. Traditional funding sources (government budgets, development banks, conventional project finance) are often stretched. Crypto and digital finance could help close this gap by mobilizing private capital in new ways. If even a fraction of the trillions in crypto market value is channelled into infrastructure annually, that could accelerate the development of highways, hospitals, and housing around the world. We may well see hybrid models where public bodies partner with crypto fund managers: imagine a municipal bond issuance that comes with tokens for retail investors globally, or a public-private partnership where part of the project equity is tokenized for crowd investors. Such models could increase civic engagement (local communities investing directly in projects they will use) and spread investment risk.
A New Era of Finance and Infrastructure
The convergence of traditional finance and crypto is ushering in a new era – one filled with cautious optimism for both investors and industries like construction. On one hand, institutional adoption of cryptocurrency is bringing unprecedented capital and credibility to the digital asset class. What was once the domain of tech geeks and day-traders is now the focus of pension fund managers and global banks. This validation is likely to strengthen the crypto ecosystem further, encouraging governments to craft clearer regulations and thus creating a virtuous cycle that draws in even more participants. The expectation that crypto will become a staple in portfolios within five years no longer feels far-fetched – it’s the logical conclusion of trends already in motion.
On the other hand, the implications go far beyond just shuffling investments in a portfolio. As crypto gains mainstream status, it is poised to intersect with the “real” economy in transformative ways, particularly in how big projects are funded. The construction and infrastructure sector, often seen as traditional or even conservative in finance, might find innovative funding options thanks to digital assets. Project finance could be democratized and globalized, allowing developers to tap into entirely new pools of liquidity. Infrastructure as an asset class might shed some of its old constraints – illiquidity, high barriers to entry – as tokenization and digital trading platforms enable easier exchange of project stakes. For construction professionals, this could mean faster financial close on projects and potentially lower financing costs if competition among investors increases. For communities and citizens, it could translate to more infrastructure getting built, as funding bottlenecks are eased by technology.
None of this is guaranteed or without challenges. Stakeholders must remain vigilant about risks: regulatory uncertainties, cybersecurity threats, and market exuberance can all pose pitfalls. The crypto market is infamous for its cycles of boom and bust, and institutional involvement, while moderating, won’t eliminate volatility or speculative excesses overnight. Risk management, due diligence, and strong governance will be as important as ever – whether one is running a crypto fund or issuing a token for a new airport project.
Yet the overall tone is one of confidence and optimism. After weathering a bitter crypto winter in 2022 and scepticism from many quarters, digital assets have emerged in 2025 with a newfound respectability and resilience. They have proven capable of integrating into the existing financial order rather than upending it completely. For forward-thinking construction industry players and investors, the message is clear: the financial landscape is expanding, not contracting. Embracing the possibilities of blockchain and crypto could unlock new growth and investment frontiers. As traditional finance and crypto converge, they are effectively building a bridge – one that connects vast capital resources with tangible infrastructure needs on the ground. Crossing that bridge wisely could usher in a future where financing a highway, a power plant, or a housing development is as innovative as the projects themselves.
In the end, the marriage of mainstream finance and crypto may well pave the way for unprecedented opportunities. By fusing the stability and scale of traditional capital with the dynamism and inclusivity of digital assets, the stage is set for a more diversified, efficient, and inclusive investment ecosystem. For those in construction and infrastructure, staying informed and engaged with these trends will be crucial. The next generation of infrastructure investment might be as much about blockchains and tokens as it is about bricks and mortar – and that could be a foundation worth building upon.
