Recent security infractions have shaken the cryptographic space, highlighting the fact that security will continue to need to be a key approach to suppliers.
In today’s number, Marcin Kaźmierczak of Redstone Oracles breaks down why 2025 will be a critical year for defi and finance in the chain.
Then, Kevin Tam analyzes the institutional adoption of Bitcoin as seen in the recent presentations of 13 F and highlights the key positions in Ask and Expert.
–Sarah Morton
You are reading Crypto for Advisors, the Coindesk Weekly Bulletin that unpacks digital assets for financial advisors. Subscribe here to get it every Thursday.
Defi Renaissance – Why 2025 will it be the year of decentralized finances and in the chain?
The recent Bybit trick for almost 401,000 ETH, valued at approximately $ 1.5 billion at that time, stated that security will play a tremendous role in the additional cryptographic adoption. Can institutions expand in the chain after such an incident? Undoubtedly. It is a matter of gradual adoption together with guaranteeing top -level security procedures.
Increasing adoption of assets that support performance: rethinking, liquid state, replacement and liquid replacement
In traditional finance, performance -generating assets are generally considered stronger -term investments than non -productive, since they provide investors cash flow and income. This perspective helps to explain why some investors prefer ether on Bitcoin. Ether is seen as more “productive” because it feeds a network that supports a wide range of decentralized applications, which benefits from the effects of the network. Beyond that, the ether can bet to gain constant performance, aligning well with the traditional assessment methods that prioritize the in progress. The growing interest in the rethinking, especially in the context of the assets generating performance, is evident in the growth of the commitment to liquid, allowing bets without friction and efficient. This trend accelerated even more in 2024 with the emergence of fluid restructuring, for example, Ether.FI, a leader liquid replacement platform, saw an explosive growth last year, with more than $ 8 billion in stagnant ether through its rails.
Source: defilama, total value blocked in Ether.fi
The total amount of ether is expected to grow and play an important role in Defi. Around a third of all ETH, or $ 90 billion, are staked, with new early tickets of traditional financial institutions that explore the rethinking. As the reference becomes more accessible through Fintech applications, some investors can transition from custody to non -custody solutions as they obtain a deeper understanding of blockchain technology.
Stablecoin growth
The global demand for exposure to the US dollar is immense, and the stablecoins are the most efficient way to fulfill it. The stables such as the USDC expand access to the preservation of the wealth called dollars and the exchange of rationalized value. In 2024, risk capital investments have fluid to Stablecoin projects, and anticipate greater development in this space. Regulatory frameworks such as EU MICA have provided more explicit guidelines, further legitimizing the stable and probably promoting a greater adoption next year. In addition, the stables are being integrated into traditional financial systems. For example, Visa has started using USDC in networks like Solana to facilitate faster and more efficient payments. In addition, PayPal entered the market with Pusd, and Stripe made one of Crypto’s most significant acquisitions when buying a bridge to expand its stable operations. In 2024, the total capitalization of Stablecoin market reached a historical maximum, exceeding $ 200 billion, and continued to establish new records in 2025.
Source: Defi Llama, Total Stablecoins Cape Market Cap
Improved interoperability and easy -to -use non -custodial solutions
A key challenge in Defi is to move funds through networks to access different investments. By 2025, significant progress is anticipated to eliminate the need to join funds by introducing a “single click” solution. This development should simplify the process for new defi users, probably attract more participants to space. In addition, wallet suppliers are expected to improve the safety of finance in the chain and expedite the incorporation process by eliminating cumbersome crypto-national configurations. This change, driven by innovations such as the account abstraction movement, aims to make cryptography more accessible and easy to use to access finance in the chain. Currently, the irreversible nature of transactions and the prevalence of sophisticated scams deter many new users. However, improved security characteristics should encourage more people to interact with decentralized finances.
Bitcoin reaching $ 100K
While simply keeping Bitcoin in its native network is not inherently linked to finances in the chain, we are witnessing a growing integration of Bitcoin with decentralized financial ecosystems. For example, approximately 0.5% of Bitcoin’s total supply through the Babylon Retanteo Protocol is now blocked to ensure staging test chains (POS). It is anticipated that Bitcoin’s greatest acceptance by large banks and some governments create drip effects, changing the public’s perception of digital currencies of being seen exclusively as a speculative asset or illegal activities to be a legitimate financial instrument, bringing new users in the chain.
-Marcin Kaźmierczak, Coo, Redstone Oracles
Ask an expert
Q: Can banks have cryptography with the SAB 122 of the SEC?
TO: The SEC 122 staff accounting bulletin can encourage banks to integrate digital assets into the regulated financial system. When opening the competition, banks can compete with centralized exchanges. Banks can offer services such as loans backed by Bitcoin, stagnation and custody services, which deal with digital assets as traditional assets.
This is a positive movement towards a more flexible regulatory approach and balanced the protections of investors with the operational realities of financial institutions.
From institutional investment to conventional recognition, this is another important change in the way in which the world sees and interacts with digital assets.
Q: What institutions (for example, sovereign wealth funds, pensions, companies, etc.) are buying bitcoin?
TO: The accumulation of sovereign wealth funds and the pension funds just begin.
The Mubadala PJSC investment company (the Wealth Fund owned by the Abu Dhabi government) has $ 436 million in a Bitcoin ETF with general assets under administration of $ 302 billion. The Sovereign Fund of Richness (AIDA) of Abu Dhabi administers $ 1.7 bills combined, indicating that its investment in Bitcoin is a relatively small part of the general portfolio.
In addition, this past fall, Mubadala offered to acquire the Canadian asset management firm CI Financial Corp. for $ 4.6 billion.
In the US, the last report of the Wisconsin Investment Board state shows that its Bitcoin ETF holdings have more than duplicated from the last quarter to more than $ 321 million.
Q: Banca in Bitcoin: What Canadian bank leads the position?
TO: The recent presentations of the fourth quarter of 2024 SEC reveal that Canadian banks of Annex 1, institutional money administrators, pension funds and sovereign wealth funds have revealed important Bitcoin holdings (see graphics).
In particular, the Bank of Montreal now exceeds Canadian banks with $ 139 million in Inversiones Spot Bitcoin ETF. And Bitcoin BMO holdings went from zero to more than $ 100 million in a single year.
Currently, in North America, there are approximately 1,623 large entities that have more than $ 25.8 billion in Bitcoin ETPs.
–Kevin Tam, specialist in digital assets
Continue reading
- Citadel announced plans to offer encryption and liquidity trade.
- Curious about Bybit’s trick? Stephen Sarent created a LinkedIn publication that summarizes some of the recovery efforts that are underway with the support of the cryptographic community.
- Coinbase announced last week that SEC would eliminate its demand against exchange.
