Crypto asset managers have grown their onchain allocations to $4 billion this year, significantly increasing their holdings since January 2025, when they were around $1 billion. According to a report from analytics platform Artemis and DeFi yield platform Vaults, this new cohort of 'crypto-native' asset managers has quietly deployed capital across a variety of opportunities, with nearly $2 billion locked into the Morpho Protocol. A majority of the market share in total value locked by these asset managers is controlled by firms like Gauntlet, Steakhouse Financial, and Re7. The shift in institutional sentiment towards crypto and DeFi has accelerated due to favorable regulatory changes in the US, enabling institutions to utilize DeFi as a reliable financial layer. The three main applications of DeFi by these institutions are providing stablecoin yield, crypto yield, and crypto borrowing. Enhanced user experience in DeFi protocols is projected to play a critical role in adoption and user retention, ensuring platforms that simplify interactions and build trust continue to thrive.

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