Jamie Dimon once doubted Bitcoin in 2017. Now his bank, JPMorgan Chase, is preparing to offer crypto-collateralized loans by 2026.
That shift tells you everything about where we are in financial services today. While retail investors check their live bitcoin price feed hoping for quick gains, institutional money has been quietly building something more substantial. We’re watching 86% of institutional investors either hold digital assets or plan allocations this year—not because they’ve caught crypto fever, but because their clients demand it and the infrastructure finally works.
From Skeptics to Service Providers
JPMorgan’s upcoming loan program isn’t happening in isolation. The $4.3 trillion banking giant already lets clients borrow against crypto ETFs, including BlackRock’s iShares Bitcoin Trust, which holds $70.1 billion in assets. The new program simply extends that logic—if you can collateralize the ETF, why not the underlying asset?
The mechanics matter here. JPMorgan will likely use third-party custodians like Coinbase to manage the actual crypto, sidestepping the thorny question of what happens when someone defaults. You keep your Bitcoin, we hold the keys until you repay. Simple.
More telling is how normal this has become across banking. Over 50% of top-tier banks now invest in blockchain infrastructure or offer crypto-related services. That’s not evangelism—that’s market response.
Partnerships between crypto companies and traditional banks have jumped 45% since 2022. Meanwhile, 44% of financial institutions now willingly offer bank accounts to crypto businesses, up from the days when banks treated crypto companies like pariahs.
Over 60 banks have connected to Visa and Mastercard’s blockchain payment networks. When the credit card giants build crypto rails, everyone else follows. This isn’t about banks suddenly loving Bitcoin. It’s about recognizing that digital assets have become too big, too established, and too profitable to ignore.
Money Talks, Crypto Walks
The numbers explain why banks can’t afford to stay on the sidelines much longer.
The total crypto market hit $3.3 trillion this year, up 43% year-on-year. That’s not retail investors buying $50 worth of Dogecoin—that’s institutional money flowing in at scale. Actually, 84% of institutional investors increased their crypto allocations in 2024, and 59% plan to allocate more than 5% of their total assets under management to cryptocurrencies this year.
Consider BlackRock’s tokenized money market fund, launched in March 2024. It’s grown to roughly $500 million in assets already, with institutional projections putting it at $10 billion by year-end. These aren’t speculative bets—they’re measured allocations from pension funds, endowments, and family offices, following structured saving principles that institutional investors have long applied to traditional assets.
The custody numbers reveal the same pattern. BNY Mellon, the 240-year-old custody bank, now handles $1.5 billion in digital assets. State Street offers similar services. These institutions don’t move fast or take unnecessary risks. When they build crypto infrastructure, it’s because their clients are demanding it and the regulatory environment supports it.
Here’s what’s driving that confidence: 49% of surveyed institutions feel more positive about digital assets than they did a year ago, while only 6% feel more negative. Regulatory clarity has become the top catalyst for growth, and institutions are responding accordingly.
Regulatory Winds Shifting
The infrastructure improvements we’ve been discussing don’t happen in a vacuum—they’re happening because regulators have started providing the clarity institutions desperately needed.
That shift in sentiment we mentioned earlier? It’s largely driven by regulatory developments. When 49% of institutional respondents feel more positive about digital assets than they did twelve months ago, that’s not because Bitcoin’s price went up. This is because, compliance frameworks are finally here.
This year, the European Union adopted its Markets in Crypto-Assets regulation, which outlines how institutional crypto services can operate in a compliance framework. At the same time, approval of spot Bitcoin ETFs by the SEC took away a significant regulatory uncertainty that kept many institutions waiting on the sidelines.
But here’s what’s more telling—institutions aren’t just waiting for perfect regulatory clarity anymore. They’re building compliance infrastructure proactively. The $5 billion in institutional crypto insurance policies we mentioned earlier? Those exist partly because institutions have figured out how to satisfy their compliance requirements while maintaining crypto exposure.
Financial institutions are also discovering that blockchain technology can actually improve their regulatory reporting. Automated compliance features built into DeFi protocols can provide real-time transaction monitoring and reporting that traditional systems struggle to match.
The regulatory environment isn’t perfect yet, but it’s predictable enough for institutions to build long-term strategies around. That predictability, more than any price movement, explains why 75% of financial institutions believe they need to advance their digital asset capabilities within two years.
We’re watching regulatory acceptance enable institutional adoption, which creates the infrastructure that makes further adoption easier. It’s a cycle that feeds itself.
Building the Plumbing
The infrastructure supporting this institutional adoption has matured in ways that aren’t immediately visible but matter enormously for long-term stability.
Insurance, for instance. Institutional clients have purchased $5 billion worth of crypto insurance policies. That’s not speculation insurance—it’s the same comprehensive coverage these institutions demand for any significant asset class.
Then there’s DeFi, which institutional investors are approaching with characteristic caution and sophistication. While 24% currently engage with decentralized finance protocols, that figure is projected to triple to 74% within two years. DeFi activity among institutions has already increased 35% since early 2023.
These institutions aren’t yield farming or aping into governance tokens. They’re using DeFi for specific functions:
- Cross-border payments and settlement (58% of international banks have adopted or are exploring blockchain solutions)
- Tokenized securities and bonds
- Automated compliance and reporting
- Liquidity management across multiple jurisdictions
The sophistication gap is narrowing quickly. What started as tech-savvy hedge funds dabbling in crypto has become pension funds and insurance companies building systematic exposure.
Perhaps most significantly, 75% of financial institutions believe they need to advance their digital asset capabilities within two years just to remain competitive. That’s not opportunity language—that’s survival language.
The New Normal
We’re past the point where crypto adoption is optional for major financial institutions. When 93% expect continued growth in traditional firms launching digital asset funds over the next three years, we’re talking about market consensus, not speculation.
The measured approach we’re seeing—custody solutions, insurance policies, regulatory compliance, gradual allocation increases—suggests this infrastructure will outlast the next market downturn. That’s probably more significant than any price prediction.
The question isn’t whether traditional finance will embrace crypto infrastructure. It’s what happens when this systematic integration becomes so standard that we stop calling it “crypto” and just call it finance.
