Crypto-native Asset Managers Surge 300% in 2025, Reaching $4 Billion in On-Chain Capital

Crypto-native asset managers have emerged as a formidable force in the decentralized finance (DeFi) landscape, with firms such as Re7, Gauntlet, and Steakhouse Financial at the forefront. Since January 2025, the on-chain capital managed by these firms has surged from $1 billion to over $4 billion, marking a significant milestone in the evolution of the crypto asset management sector.

These asset managers are not only deploying capital across a diverse range of opportunities but are also contributing to the evolution of DeFi by implementing advanced risk management practices and allocation strategies, particularly within the stablecoin sector. The Morpho Protocol, for instance, now hosts nearly $2 billion of this professionally managed capital, reflecting the growing institutional interest in DeFi-native structures. Gauntlet leads this market segment with 31% of the share, followed by Steakhouse Financial at 27%, Re7 at 23%, and MEV Capital at 15.4%. This competitive environment underscores the increasing sophistication and specialization within the crypto asset management industry.

Institutional views on DeFi are undergoing a transformation. Once seen as an unregulated frontier, DeFi is now being reimagined as a flexible, programmable financial layer. The development of permissioned DeFi markets on platforms like Euler, Morpho, and Aave represents a conscious shift to meet institutional standards. These environments offer controlled access points where institutions can interact with DeFi protocols while satisfying essential compliance requirements, including KYC, AML, and counterparty risk assessments.

Institutional perspectives on crypto are shifting, especially as regulation evolves and DeFi platforms mature. DeFi is no longer seen as an unregulated threat but is increasingly viewed as a customizable, integrated financial layer. Many fintech firms, crypto wallets, and exchanges are now using DeFi as hidden infrastructure, abstracting its complexities to improve user experience. This approach helps with yield integration, capital efficiency, user retention, and new revenue streams. Institutions primarily engage with DeFi through three avenues: stablecoin yield, crypto yield, and borrowing. These services are embedded in familiar, centralized apps, masking the underlying DeFi mechanisms. For example, platforms like Coinbase and PayPal offer stablecoin yields via USDC and PYUSD, respectively. On the lending side, platforms like Coinbase offer crypto-backed loans using protocols such as Morpho, exemplifying what is called the “DeFi mullet”: a fintech interface powered by a DeFi backend.

The growth of crypto-native asset managers is a testament to the increasing acceptance and integration of blockchain technology within the financial industry. These managers are not only investing in traditional cryptocurrencies but also exploring new opportunities in DeFi, tokenization, and other blockchain-based financial instruments. This diversification allows them to offer a broader range of investment products and services, attracting more institutional and retail investors to the crypto space.

The rise in onchain capital also highlights the evolving regulatory landscape for crypto assets. As regulators around the world begin to recognize the potential of blockchain technology, they are developing frameworks to govern its use. This regulatory clarity is essential for the continued growth of the crypto asset management sector, as it provides a stable environment for investment and innovation.

The growth of crypto-native asset managers is also driven by the increasing demand for digital asset management services. As more individuals and institutions seek to invest in cryptocurrencies, they require professional management to navigate the complexities of the market. Crypto-native asset managers are well-positioned to meet this demand, offering expertise in blockchain technology, DeFi protocols, and digital asset management.

The expansion of onchain capital from $1 billion to over $4 billion is a significant milestone for the crypto asset management sector. It reflects the growing maturity and sophistication of the industry, as well as the increasing acceptance and integration of blockchain technology within the financial industry. As the sector continues to evolve, crypto-native asset managers will play a crucial role in driving innovation and growth in the digital asset space.