Institutional investors are keen to build on Singapore’s digital asset ecosystem by optimising their exposure to crypto alongside more conventional portfolio allocations.

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Institutional engagement with digital assets in Singapore is being driven not only by trading opportunities but also by the need to build knowledge around market access, custody, settlement and the underlying technology.

Banks, asset managers and family offices are treating digital assets as a permanent fixture within modern portfolios, prioritising regulated compliance, secure custody and institutional-grade infrastructure over short-term retail trading dynamics.

Crypto as a Portfolio Diversifier

Despite ongoing volatility, cryptocurrency, particularly Bitcoin, continues to be viewed as a meaningful portfolio diversifier by institutional investors in Singapore, observes Nicholas Strain, director of institutional sales at LMAX Digital.

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“As the asset class has become more mainstream, institutions are evolving from simple buy-and-hold exposure toward more sophisticated, risk-adjusted strategies, including the use of derivatives and options to manage downside while retaining upside potential,” he says.

From Allocation Decisions to Execution Strategy

Conversations with institutional investors have moved from asking whether to allocate to figuring out how much, through what vehicles and how operational risk should be managed, says Julien Le Noble, chief executive officer GTN Asia.

“Financial institutions are no longer waiting on the sidelines and have begun allocating,” he adds. “They understand that building exposure now, within a regulated framework, could position them ahead of their competitors in other markets, so they are moving forward.”

Tokenisation and Long-Term Growth Narrative

As the global push towards tokenised instruments and on-chain finance proliferates, Mark Garabedian, director of digital assets and tokenization at Wellington Management Singapore, refers to crypto as the most direct investment opportunity to participate in growth.

“Crypto assets encompass a broad range of sectors and instruments that have defining characteristics, with some offering diversification benefits,” he adds.

“The asset class is still in its infancy in terms of adoption and thus its diversification and volatility characteristics are expected to change over time as the volume of investment flows grow.”

Market Stress, Correlations and Maturing Behaviour

In the short term, there may be some correlations due to macro stress events, but crypto’s fundamental drivers remain distinct from traditional asset classes.

As Le Noble observes, drawdowns can be seen as entry points rather than reasons to exit — which is a sign of maturity for the asset class.

Portfolio Construction and Institutional Frameworks

Institutions are increasingly approaching digital assets through a portfolio allocation lens, asking how they sit alongside equities, commodities and alternatives within a broader framework, agrees Osh Ong, OKX SG chief operating officer.

“The engagement is structured and deliberate, with custody arrangements, liquidity profiles and regulatory clarity all firmly on the checklist before any meaningful allocation is made,” he says, adding that volatility hasn't diminished crypto's relevance but rather pushed investors toward a more nuanced understanding of how these assets actually behave.

“In some market environments, crypto trades as a high-beta proxy for global liquidity; in others, it starts to look more like a hedge sitting alongside other alternative assets,” adds Ong. “That dual behaviour is increasingly something institutions are factoring into how they size and manage their exposure, rather than treating it as a reason to stay on the sidelines.”

Institutional Conviction in Blockchain Infrastructure

Hassan Ahmed, country director Singapore at Coinbase, reckons the vast majority of institutions now view blockchain as a long-term value driver and a structural upgrade to the financial markets.

“Local banks and fund managers are announcing tokenisation initiatives that show this technology is ready for deployment,” he says. “Our regulatory framework prioritises trust over speed, which is a critical factor for local investors, who now rank security as their primary concern.”

Ahmed also notes that investors increasingly treat digital assets as a strategic macro diversifier, making the point that Bitcoin in particular has evolved into a liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term gauge, tracking monetary cycles more closely than traditional metrics such as CPI and creating an interesting correlation with other safe-haven assets.

Growing Role of Crypto in Portfolios

The old thesis of putting 1–2% into crypto as an uncorrelated hedge has largely run its course. Crypto increasingly moves with risk assets during market stress and institutions have noticed. But rather than stepping back, they have changed how they engage.

That is the view of Tianwei Liu, CEO and co-founder of StraitsX, who says the clearest signal of this trend is the rise of Bitcoin treasuries.

“At the same time, stablecoins have opened a separate lane for institutions seeking the infrastructure without the price exposure,” he continues. “Settlement, treasury operations and cross-border payments are already running on these rails, making the landscape far less binary. The question is no longer whether to participate, but how.”

Spectrum of Institutional Strategies

Samar Sen, head of international markets at Talos, refers to a wide range of investment strategies, from family offices holding crypto as a long-term investment, to global macro hedge funds trading crypto arbitrage Arbitrage Arbitrage is defined as the practice of taking advantage of a price difference between two or more markets.In particular, this involves the simultaneous buying and selling of securities, currencies, cryptos, or commodities in different markets. Arbitrage has the effect of causing prices of the same or very similar assets in different markets to converge over time.In order for arbitrage to occur, there must be a uniform set of conditions that need to be met. For example, the same asset does not t Arbitrage is defined as the practice of taking advantage of a price difference between two or more markets.In particular, this involves the simultaneous buying and selling of securities, currencies, cryptos, or commodities in different markets. Arbitrage has the effect of causing prices of the same or very similar assets in different markets to converge over time.In order for arbitrage to occur, there must be a uniform set of conditions that need to be met. For example, the same asset does not t Read this Term opportunities, to crypto funds offering yield generation on idle assets.

“We are seeing a shift toward more structured participation,” he suggests. “Crypto is increasingly considered alongside other traditional asset classes such as equities, FX and commodities, particularly from a portfolio construction perspective. That is relevant in Singapore, where many institutions are already active across FX and derivatives markets and are extending those frameworks into digital assets.”

At the same time, interest is starting to broaden out. Beyond cryptocurrencies, there is more focus on tokenised assets and collateral, especially where they can be incorporated into existing trading, financing and risk workflows.

Regulatory Clarity and Market Integration in Singapore

“Singapore’s regulatory stance has underpinned this,” adds Sen. “The approach has been to integrate digital assets into the existing financial system, rather than treat them separately. That has given institutions enough clarity to move from early-stage exploration into live trading and allocation.”

From Low Correlation to Behaviour-Based Allocation

In the early days of crypto, the diversification argument was often framed around low correlation. Now institutions are looking more closely at how crypto behaves in practice, which includes how easy it is to enter and exit positions, how it reacts during periods of stress and how it moves alongside other risk assets.

Beyond crypto, tokenised assets — whether novel forms of previously illiquid assets or traditional assets like equities and bonds represented on blockchain rails — are expanding how institutional investors express trading and investment views.