Institutional investment in the cryptocurrency sector continues to gain momentum, with recent developments highlighting a growing interest in decentralized finance (DeFi) and blockchain startups. Bitwise Asset Management has made its first institutional DeFi allocation through Maple Finance’s Bitcoin lending platform, signaling increased confidence in on-chain lending solutions. Meanwhile, venture capital funding for blockchain startups saw a notable uptick in February, with over $1.1 billion raised across various sectors, including DeFi, artificial intelligence, and payments. Bitwise Makes First Institutional DeFi Investment in Maple Finance’s Bitcoin Loans Bitwise Asset Management has taken a significant step into decentralized finance (DeFi) with its first institutional allocation in the space. The firm has invested in Maple Finance’s overcollateralized Bitcoin loans, marking a pivotal moment in institutional adoption of on-chain lending. Maple Finance disclosed this development on March 6, though the exact size of the investment was not revealed. Bitwise’s allocation is reflected in Dune Analytics’ total value locked (TVL) data for Maple’s “blue chip secured” strategy. Notably, the platform saw a roughly $5 million increase in its TVL between March 4 and March 5, signaling a substantial contribution from the asset manager. In a joint statement, Bitwise and Maple suggested that this move represents a broader shift as institutional capital pivots from traditional fixed-income investments to more efficient and scalable on-chain lending markets. Bitwise’s move comes at a time when institutional investors in the US are cautiously exploring DeFi opportunities, especially in light of regulatory shifts under President Donald Trump’s administration. Trump has positioned himself as an advocate for crypto innovation, pledging to make America the “world’s crypto capital” while appointing industry-friendly regulators to key financial oversight positions. Jeff Park, head of alpha strategies at Bitwise, highlighted the firm’s focus on crypto-native investments that provide dynamic, uncorrelated returns. “We’ve always sought to take advantage of unique opportunities in digital assets, and we see on-chain credit as an emerging area of potential,” Park said. Maple’s blue-chip secured strategy currently offers over 9% APR, a figure that significantly outperforms traditional financial alternatives. Comparatively, Aave’s permissionless DeFi lending protocol offers a mere 0.01% APR for supplying Bitcoin on Ethereum, according to Aave’s official website . Even US dollar-denominated money markets, represented by the Federal Reserve’s secured overnight finance rate (SOFR), only provide an approximate 4.3% APR. This stark difference in yield potential is likely a key factor in Bitwise’s decision to allocate funds to Maple Finance. As institutions continue searching for high-yield investment opportunities, DeFi lending platforms that offer strong risk-adjusted returns could see increased adoption. Maple Finance’s Growing Role in Institutional On-Chain Credit Since its founding in 2021, Maple Finance has specialized in providing on-chain credit solutions for institutional clients. The platform’s TVL across all strategies has now surpassed $700 million, cementing its status as a major player in the on-chain lending sector. Bitwise, on the other hand, is one of the largest crypto-focused asset managers, overseeing $12 billion in assets under management (AUM). The firm sponsors multiple US-based exchange-traded funds (ETFs), including the Bitwise Bitcoin ETF (BITB) and Bitwise Ethereum ETF (ETHW). The implications of Bitwise’s investment in Maple Finance could be far-reaching. As more institutions begin to explore DeFi lending as a viable alternative to traditional fixed-income investments, platforms like Maple Finance may see an influx of capital from established financial entities. With regulatory clarity improving and yields in the DeFi space continuing to outpace those in traditional finance, the institutional adoption of on-chain lending appears poised for rapid growth. Whether this trend accelerates depends largely on the continued evolution of regulatory frameworks and the ability of DeFi platforms to maintain transparency, security, and compliance with institutional risk standards. For now, Bitwise’s investment in Maple Finance serves as another key indicator that the lines between traditional finance and DeFi are beginning to blur, paving the way for a new era of blockchain-based capital markets. Crypto Venture Capital Investment Surges in February as DeFi Projects Attract Major Funding In related news, venture capital investment in blockchain and cryptocurrency startups saw significant growth in February, with decentralized finance (DeFi) projects drawing substantial funding despite persistent market volatility. This surge signals continued confidence in blockchain development as institutional and private investors allocate capital toward key emerging sectors in the industry. According to data from The TIE, a total of 137 cryptocurrency startups secured a combined $1.11 billion in funding in February. Among these, DeFi projects alone raised nearly $176 million across 20 initiatives, reflecting the sector's enduring appeal despite regulatory uncertainties and price fluctuations in the broader crypto market. In addition to DeFi , business service providers were among the biggest beneficiaries of venture capital interest, securing a total of $230.7 million in funding across eight firms. Security services, payments, and artificial intelligence (AI) startups also attracted significant investor attention, indicating a broader trend of integrating blockchain technology with AI and financial infrastructure. The TIE reported that venture capitalists focused on investments spanning multiple sectors, emphasizing key narratives such as AI, developer tools, DeFi, decentralized physical infrastructure networks (DePIN), crypto funds, and payment solutions. Additionally, The TIE’s dataset incorporated crypto investment funds by analyzing filings with the US Securities and Exchange Commission (SEC). Among the largest investment rounds in February were: Strix Leviathan – $79.95 million Cambrian Asset Management – $20.43 million Galaxy Digital – $18.43 million These investments suggest a growing institutional appetite for structured crypto investment funds, which play a crucial role in bridging traditional finance with digital assets. February also saw increased consolidation within the crypto space, with six notable mergers and acquisitions (M&A) taking place. Among the most significant deals: Forte acquired Web3 privacy developer Sealance to enhance privacy solutions for blockchain applications. Phantom acquired token data platform SimpleHash, further strengthening its data analytics capabilities. The uptick in M&A activity suggests that well-capitalized firms are seizing opportunities to expand their market presence and bolster their technological capabilities through strategic acquisitions. Expectations for 2025: Growth Amidst Market Volatility As 2025 unfolds, crypto markets have experienced heightened volatility, largely influenced by US President Donald Trump’s second-term economic policies. The administration’s erratic trade policies and tariff threats have contributed to short-term price swings across financial markets, including cryptocurrencies. However, Trump’s pro-crypto stance is expected to bring much-needed regulatory clarity, fostering a more stable investment environment in the long term. Additionally, macroeconomic factors appear favorable for venture capital funding. The US Federal Reserve is widely expected to lower interest rates multiple times this year, a shift that would provide a boost to private capital markets. According to Harbour Invest, a Boston-based private equity firm, ”dealmaking confidence has started to return,” a trend that first emerged in the final quarter of 2024. Despite lingering regulatory uncertainty, the US has remained a key hub for crypto venture capital, accounting for 36% of all deals in 2024. With regulatory clarity under the Trump administration, experts anticipate a significant expansion in crypto VC funding. According to PitchBook, crypto venture capital investments are expected to exceed $18 billion in 2025, a substantial increase from the $13.6 billion raised in 2024. As the crypto industry continues to mature, venture capital firms are positioning themselves at the forefront of innovation, supporting projects that have the potential to reshape the global financial landscape. With institutional investors increasingly embracing blockchain-based solutions, the coming year could mark a new era of mainstream adoption and investment in digital assets.
