Crypto-Native Asset Managers Quadruple Onchain Holdings: A Remarkable Surge
Are you watching the crypto market? Something significant is happening: a new wave of financial players, the crypto-native asset managers, are dramatically increasing their presence directly on the blockchain. This isn’t just a small uptick; their onchain holdings have seen explosive growth, signaling a major shift in how digital assets are managed and utilized.
Why Are Onchain Holdings Quadrupling for Crypto Asset Managers?
According to a recent report by analytics platform Artemis and DeFi yield platform Vaults, a distinct class of crypto-native asset managers has emerged. These firms aren’t just dabbling in crypto; they are building their capital base directly on blockchain networks. The report highlights a staggering growth:
- In January 2025, this sector held approximately $1 billion onchain.
- As of the report’s release, their onchain holdings have soared to over $4 billion.
This fourfold increase in capital deployed onchain points to a growing confidence and sophistication within this sector. These managers are actively seeking opportunities across the decentralized landscape.
DeFi Adoption: The “Invisible” Engine for Institutions?
Beyond the direct growth of crypto-native firms, the report also touches on a broader trend: increasing DeFi adoption by traditional institutions and fintechs. The narrative is shifting from viewing DeFi as a wild, ungoverned frontier to seeing it as a valuable, configurable financial layer. This change in perspective is partly attributed to regulatory shifts, particularly in the US, which are providing greater clarity and confidence.
Fintech companies, crypto wallets, and exchanges are reportedly leveraging DeFi tools as an “invisible” back-end. By abstracting away the complexity of decentralized protocols, these platforms can integrate features like yield generation directly into their user experience. This enhances user retention, opens new revenue streams, and improves capital efficiency for the platforms.
Key DeFi Use Cases Driving Institutional DeFi
The report identifies three primary ways institutions are engaging with DeFi, often by simplifying the underlying complexity for their users:
- Stablecoin Yield: Offering users returns on stablecoin deposits. Examples include Coinbase providing yield on USDC and PayPal doing the same for PYUSD. This leverages DeFi protocols that generate yield on stablecoins.
- Crypto Yield: Allowing users to earn returns on other cryptocurrencies.
- Crypto Borrowing: Providing loan services to users, often backed by crypto collateral. Coinbase’s crypto loan service, which utilizes protocols like Morpho, is cited as an example of this “DeFi Mullet” model – a fintech front-end powered by a DeFi back-end.
These use cases demonstrate how institutional DeFi is evolving, moving beyond simple trading to integrating more complex financial primitives into user-friendly products.
Where is Capital Being Deployed?
Crypto-native asset managers are strategically deploying capital across various DeFi opportunities. A notable example is the nearly $2 billion locked into the decentralized lending and borrowing platform Morpho Protocol by major firms. The report highlights that a significant portion of the total value locked by these large crypto-native managers is controlled by just three firms:
- Gauntlet
- Steakhouse Financial
- Re7
These firms represent two-thirds of the market share among the major players, indicating a concentration of sophisticated capital within a few key entities.
User Experience Matters for Onchain Holdings Growth
While institutional adoption is crucial, the report also emphasizes the growing importance of user experience (UX) for DeFi protocols themselves. For capital to remain “sticky” onchain, platforms need to prioritize reliability, predictability, and ease of use. Features that simplify interactions, reduce friction (like gas fees), and build trust through transparency are key to retaining users and attracting more onchain holdings.
The Future of Finance is Onchain?
The rapid growth in onchain holdings by crypto-native asset managers, coupled with the increasing use of DeFi as an “invisible” back-end for institutions, paints a clear picture: the decentralized financial landscape is maturing and attracting serious capital. This surge in DeFi adoption and institutional DeFi engagement, particularly in areas like stablecoin yield and borrowing, suggests that blockchain-based finance is becoming increasingly integrated into the broader financial ecosystem. As infrastructure improves and user experience is prioritized, we can expect this trend of capital moving onchain to continue.
