Polygon Executive Explains Why Big Finance Wants Crypto in 2025 and Why Retail Doesn’t

Core Insights - The cryptocurrency industry has entered a new phase in 2025, marked by significant institutional participation, with institutions now accounting for approximately 95% of crypto inflows, while retail participation has decreased to about 5-6% [2][5] Group 1: Institutional Participation - Large asset managers such as BlackRock, Apollo, and Hamilton Lane are allocating around 1-2% of their portfolios to crypto, introducing ETFs and piloting tokenized investment products on-chain [3] - The shift in institutional interest is attributed to improved infrastructure that supports institutional activity, allowing for transactions on well-tested, Ethereum-compatible public networks that meet regulatory standards [3][4] - Institutions are entering the crypto space primarily for yield generation and operational efficiency, with the first wave focusing on dollar-denominated returns through compliant products like tokenized treasuries [3][4] Group 2: Retail Participation - Retail investors have largely exited the market due to losses from speculative meme coin cycles and unrealistic profit expectations, leading to a decline in trust among smaller investors [5] - Despite the current retreat of retail investors, it is not viewed as a permanent departure from the market [5]