Crypto for Advisors Highlights DeFi and On-Chain Finance Trends for 2025
Recent security breaches in the crypto space underscore the need for enhanced security measures across providers.
Key Insights on DeFi and Institutional Adoption
- 2025 is anticipated to be pivotal for decentralized finance (DeFi) and on-chain finance, emphasizing the importance of security after incidents like the ByBit hack, which resulted in a loss of 401,000 ETH valued at approximately $1.5 billion.
- Increased interest in yield-bearing assets such as staking and liquid staking is noted, with around one-third of all ETH, or $90 billion, currently staked.
- Stablecoins are seeing significant growth, with the market cap surpassing $200 billion in 2024, driven by regulatory frameworks and adoption by traditional financial entities like Visa and PayPal.
- Improved interoperability solutions are expected by 2025, simplifying fund movement across networks and enhancing user experience in DeFi.
- Bitcoin is becoming increasingly integrated into decentralized finance, with a growing percentage of its supply being used in Proof-of-Stake chains.
Institutional Interests
- Mubadala Investment Company holds $436 million in a bitcoin ETF, part of a larger $302 billion portfolio.
- The State of Wisconsin Investment Board reported over $321 million in bitcoin ETF holdings, reflecting increased institutional interest.
- Bank of Montreal leads Canadian banks with $139 million in spot bitcoin ETF investments, demonstrating rapid growth in institutional holdings.
Additional Developments
- Citadel plans to enter the crypto trading and liquidity market.
- Coinbase's ongoing legal issues with the SEC have reportedly been resolved, with the lawsuit being dropped.