Crypto investors are prioritizing core market infrastructure over decentralized finance initiatives, with senior decision-makers citing liquidity constraints and shallow market depth as the main obstacles to broader institutional adoption targeted for 2026, according to a recent survey.
Infrastructure Takes Priority Over DeFi
Respondents indicated a stronger near-term focus on foundational infrastructure such as custody, compliance tooling, risk controls, execution and settlement systems, and institutional-grade data and connectivity. While interest in decentralized finance remains, large firms appear to be emphasizing operational readiness and regulatory alignment before expanding into higher-risk or experimental segments of the market.
Key Barriers: Liquidity and Market Depth
Senior decision-makers highlighted two interrelated challenges that continue to limit institutional participation:
- Liquidity constraints: Limited capacity to enter and exit sizable positions without materially impacting prices, particularly during periods of market stress.
- Market depth: Insufficient volume at multiple price levels, which can lead to slippage and higher execution costs for larger orders.
For institutions that require predictable execution and robust risk management, deeper and more consistent liquidity across major trading venues is a prerequisite. Without it, portfolio rebalancing, hedging, and compliance-driven adjustments remain difficult to perform at scale.
Implications for Institutional Adoption in 2026
The survey findings suggest market participants expect the next phase of institutional adoption to depend on the maturation of core infrastructure and improved market quality. Addressing liquidity and depth could reduce execution risk and support more sophisticated strategies, while advances in custody, reporting, and connectivity would help meet operational and regulatory standards.
As firms plan for 2026, the emphasis appears to be on building resilient market rails first, with DeFi expansion following as risk, compliance, and execution requirements are met.