- Bitget CEO says institutional investors are still healing from last year’s shock.
- The market’s biggest challenge today is how institutions think about crypto.
- Institutional investors are not leaving the crypto ecosystem but are evolving.
Bitget CEO Gracy Chen has outlined the underlying factors behind the ongoing challenges facing establishments within the crypto sector. In her latest post on X, Chen noted that her deductions were based on interactions with Wall Street traders and institutional clients during her recent visit to the US and Europe.
Institutions Are Still Healing
Chen found out that several institutional trading firms, including the largest venues, suffered around a 30-40% decline in liquidity from last year’s 10.10 market shock and are still healing. She described the event as a structural decline, noting that it has raised the cost of trust within the ecosystem. According to Chen, institutions have become more cautious about deploying capital due to increased sensitivity to market manipulation.
During her research, Chen discovered that the crypto market remains consistent in long-term conviction. However, she noted that the playbook has changed. Chen explained that despite a difficult market, institutional interest in digital assets hasn’t gone away. According to her, more firms are quietly preparing for the next cycle amid subdued prices.
Crypto Market’s Biggest Challenge
Nonetheless, she noted that the biggest challenge is how institutions think about crypto. Chen said they no longer view cryptocurrency as a standalone speculative asset class but as one component within a broader global portfolio. Rather than cryptocurrency, multi-asset strategies, tokenized real-world assets, cross-asset collateral and hedged portfolios are becoming standard discussions.
Chen believes institutions are not leaving the crypto ecosystem but are evolving and optimizing for more stable, diversified return profiles rather than relying on pure crypto beta. She thinks the new trend could pose some difficulties for platforms built only around crypto trading.
What Institutional Investors Want
Among the factors that Chen identified, she observed that more than ever, institutions want peace of mind. Chen noted that the various unwanted incidents that occurred within the crypto space over the past few years reinforced the lesson that safety is the minimum requirement for staying at the table.
The Bitget executive noted that asset security, risk management, and capital efficiency dominate today’s conversations between institutions and VIP clients. She noted that they do not want to put all their eggs in one basket despite not wanting their capital sitting idle or becoming fragmented across different platforms and accounts.
Back to Fundamentals
Chen concluded that the financial industry has always rewarded scale and trust, and crypto is no different. Hence, there is no reason for projects to be complacent. According to her, bear markets are uncomfortable, but they have a way of forcing everyone back to fundamentals. Chen believes the companies that emerge stronger won’t simply be the ones that cut costs or survive another cycle but those that manage short-term risk while continuing to build infrastructure, discover genuine product-market fit, and solve real customer problems.
Related: DBS Bank Launches Tokenized Structured Notes on Ethereum for Institutional Investors
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