Cryptocurrency Market Sees Upsurge in Institutional Adoption Despite Downside: Staked Ethereum Supply Hits New High
The cryptocurrency market has seen another week of decline, but amidst the negativity lies a silver lining – institutional adoption is on the rise. A surge in staked Ether supply has reached an all-time high, indicating that more investors are opting to hold their tokens for future gains rather than selling at current prices.
The latest data from Dune Analytics reveals that over 35 million Ether coins are now staked under the Ethereum blockchain’s proof-of-stake consensus model. This represents a significant increase in investor confidence and a concomitant decline in liquid supply, as investors lock away their ETH to generate passive income in exchange for holding them for a specific time period.
The growth of staked Ether supply suggests that institutional players are beginning to take notice of the emerging class of "crypto-native" asset managers. These firms have quadrupled their on-chain holdings since January, with some major institutions locking in nearly $2 billion in decentralized lending and borrowing protocols like Morpho Protocol.
According to a recent report by Artemis and DeFi yield platform Vaults, this sector has grown its onchain capital base from roughly $1 billion to over $4 billion since the start of 2025. The report notes that asset managers are quietly deploying capital across various opportunities, giving the example of major firms having locked in nearly $2 billion in Morpho Protocol.
Nasdaq-Listed Lion Group Holding Establishes $600 Million Crypto Treasury Reserve
Meanwhile, publicly-traded companies continue establishing corporate cryptocurrency reserves, signaling increased institutional adoption of digital assets beyond Bitcoin. On Thursday, Nasdaq-listed Lion Group Holding announced plans to establish a $600 million crypto treasury reserve with the Hyperliquid (HYPE) token as its main asset.
The Singapore-based trading platform will deploy its first $10.6 million investment by Friday after securing a $600 million facility from ATW Partners. This marks another significant development in institutional adoption, highlighting the growing interest in cryptocurrencies and blockchain technology among publicly-traded companies.
Hackers Leak Nobitex Source Code Following $100 Million Hack
The cryptocurrency market has also witnessed some negative developments with hackers behind the $100 million exploit of Iranian cryptocurrency exchange Nobitex releasing the platform’s complete source code. This threat to remaining user assets marks a worrying trend in cybersecurity, with the group claiming responsibility for the attack.
The X thread detailed key security measures of the exchange, including its privacy settings, blockchain cold scripts, and list of servers. The hackers warned that assets left on Nobitex are now entirely out in the open, following the release of the source code.
Flare Network Bridges XRP to DeFi for Increased Liquidity
Despite technical limitations hindering widespread adoption of decentralized finance (DeFi) with non-smart-contract assets like XRP, Flare Network’s innovative infrastructure is helping bridge this gap. XRPFi, a DeFi ecosystem centered on XRP, leverages Flare Network’s bridging and smart contract technology to bring XRP into the realm of programmable finance.
FAssets, a key component of Flare’s infrastructure, creates fully collateralized representations of non-smart-contract assets like XRP. This has enabled holders to deploy their XRP in DeFi protocols within Flare’s network, including wrapped versions of XRP like FXRP that allow for liquid staking and passive income.
Crypto Derivatives Exchange Deribit Integrates BlackRock’s BUIDL
In a major development, crypto derivatives exchange Deribit and spot exchange Crypto.com will accept BlackRock’s tokenized US Treasury fund as trading collateral for institutional and experienced clients. This move marks another significant step in the increasing adoption of digital assets in traditional finance.
According to Forbes, this integration will allow institutional traders to use low-volatility, yield-bearing digital instruments as collateral for their accounts, lowering margin requirements for leveraged trading. The deal can expand the utility of BlackRock’s Institutional Digital Liquidity Fund (BUIDL), which holds nearly 40% of the tokenized Treasury market share.
DeFi Market Performance Suffers
Despite the positive trends in institutional adoption and cryptocurrency innovation, the DeFi market has experienced a decline in recent weeks. According to Cointelegraph Markets Pro and TradingView, most of the top 100 cryptocurrencies ended the week in the red.
The Story (IP) token fell over 18% as the week’s biggest loser in the top 100, followed by the Four (FORM) token, down over 12% during the past week. Total value locked in DeFi has also seen a slight decrease in recent weeks, with some notable exceptions like lending platforms and decentralized exchanges.
Conclusion
As the cryptocurrency market experiences turbulence, institutional adoption remains one of its most promising areas of growth. The staked Ethereum supply has reached an all-time high, signaling a growing interest among investors to hold their tokens for future gains rather than selling at current prices.
The emergence of "crypto-native" asset managers and their significant on-chain holdings are further indicators of the increasing presence of institutional players in the market. With publicly-traded companies like Nasdaq-listed Lion Group Holding establishing crypto treasury reserves, it is clear that cryptocurrencies and blockchain technology have become an integral part of traditional finance.
Despite some negative incidents like the Nobitex hack and decline in DeFi market performance, innovation continues to push forward with notable developments like Flare Network’s bridging of XRP to DeFi.
