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Why 2025 Will Be a Year of M&A in DeFi

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The final quarter of 2024 marked a surge in cryptocurrency mergers and acquisitions (M&A) activity, signalling that the post-election sentiment shift could spark even more deals in the new year.

M&A has already been on the rise, and the recent acquisition of Bridge by Stripe marked a significant milestone that highlights a trend of the increasingly blurred lines between traditional finance and digital assets.

According to The Block Pro data, activity in 2024 was still behind 2022’s all-time high of 271 deals, signaling steady yet restrained growth but there are signs that the record may be broken in 2025. With major institutions including BlackRock, Fidelity, and Grayscale launching Bitcoin and Ethereum ETPs, and the Trump election fueling optimism, the stage is set for a renewed M&A wave.

The key question now is — what does M&A mean for driving innovation in the DeFi space?

Bridging the Gap

Recent high-profile acquisitions, such as Stripe’s purchase of Bridge and Robinhood’s acquisition of Bitstamp, underscore the undeniable intersection between traditional finance and digital assets. These deals aren’t just about expansion, they’re a clear signal that firms are looking to strengthen their offerings to meet the growing demands of institutional clients who want secure custody and robust risk management.

A lot of discourse has focused on pitting DeFi against TradFi, but the recent M&A activity suggests we may be entering a new era where finance is finally a unified, evolving ecosystem. Traditional finance has hurdles to clear in its DeFi transition, especially around regulatory compliance and accessibility. To navigate these waters, TradFi needs enterprise-grade solutions that not only meet regulatory standards but also simplify the user experience. DeFi platforms, while powerful, can sometimes be challenging for non-crypto native users due to their complex interfaces

Those looking to branch into crypto should focus on platforms like Enzyme with transparent on-chain infrastructure, that combines automated features like smart contracts, automated investment strategies, and risk management tools within a user-friendly interface. This approach simplifies the management of digital assets, ensuring compliance without the usual complexity of blockchain technology. By adopting these tools, traditional financial institutions can transition into the DeFi space more easily, minimizing risk while maintaining control.

Composability as a Catalyst for Change

For builders and managers, consolidation caters to the convenience of accessing a wider pool of resources within a secure, integrated infrastructure, making it easier to innovate. This global movement bridges the gap between Web2 and Web3, gradually dissolving the boundary to form a unified, innovative space. It’s also happening within the decentralized space itself.

M&A plays a key role in driving composability in DeFi by enabling the consolidation of resources, technologies, and expertise from multiple projects, which can strengthen interoperability between different protocols. Composability is the ability for different protocols and apps to integrate and work together, enabling users to build complex financial solutions and acting as a catalyst for growth in the DeFi space. This increasing consolidation and merging of different protocols and resources empowers builders to build new financial products. This reduces barriers to entry, meaning developers can create powerful applications without starting from scratch, while users benefit from easy access to interconnected services.

Liquid Staking Tokens are a prime example of composability and a key trend that is predicted to grow in 2025. Earning staking rewards while also being used as liquidity or collateral, they strengthen capital efficiency and maximize the utility of assets across the DeFi ecosystem.

The Future of DeFi in 2025

The future for decentralized finance is bright. Established Ethereum protocols have been consistently building and improving. These advancements, combined with a more favourable regulatory environment and enhanced user experiences, are setting the stage for significant growth.

The future of decentralized finance lies in composability and interoperability. Networks should not be an obstacle to investment, but navigating them can sometimes be complex. Simplified interfaces that bridge the complexity of multiple networks allow users to focus on opportunities rather than technical barriers.

As M&A activity continues, crypto firms will have to balance the innovation of DeFi with the practical realities of regulation, governance, and market competition. This consolidation is key to building secure ecosystems and meeting the increasing expectations of investors and builders.

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Why Trump’s Tariffs Could Actually Be Good for Bitcoin

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So far, crypto markets haven’t behaved as expected under the Trump Administration. Investors hoped that regulatory reform and policies like a Bitcoin Strategic Reserve would drive prices appreciably higher. But it’s been the opposite. Bitcoin has fallen from highs well above $100,000 at the beginning of the year to a trough in the mid-80,000s for most of March.

Crypto prices have suffered from being increasingly correlated with traditional assets like stocks and bonds, which have been hit by macroeconomic uncertainty. Tariffs — surcharges the U.S. places on imports from other countries — have Wall Street worried about a global recession. Crypto investors have been steering clear of crypto assets, which are seen as relatively risky.

“This is all about markets’ ‘risk appetite’ which continues to deteriorate, and for the time being drives a wedge between crypto assets and gold, which continues to be the ‘safe haven’ of choice,” said Marc Ostwald, Chief Economist & Global Strategist at ADM Investor Services International.

“[That’s] in no small part driven by central bank FX reserve managers, who are seeking to reduce USD exposure, which has long been a source of concern to them.”

As the global financial and trade system becomes more fragmented, investors are seeking alternatives to riskier assets, including dollars. For now, that means turning to gold, which is up 18% year-to-date.

But that could change, said Omid Malekan, an adjunct professor at Columbia Business School and author of «The Story of the Blockchain: A Beginner’s Guide to the Technology That Nobody Understands.» Bitcoin could be the new gold soon enough.

“I think the entire [future] is uncertain and in some ways unknowable, because there are many crosscurrents and both crypto and tariffs are new. Some people argue that crypto is just a risk-on tech asset and would sell off due to tariffs. But bitcoin has found footing in some circles as ‘digital gold’ and the physical variety is soaring on the tariff news. So which will it be?”

In other words, economic uncertainty could lead investors to seek out bitcoin just as they have sought out gold in recent months.

Another note of positivity: the impact of tariffs on crypto could be “priced in” and the worst might be over already, said Zach Pandl, head of research at Grayscale, a leading crypto asset management firm.

President Trump is due to announce U.S. tariffs on Wednesday, April 2, at 4 p.m. ET—what’s known as “Liberation Day.” According to reports, he’ll lay out “reciprocal tariffs” against 15 countries that have levied tariffs against the U.S., including China, Canada and Mexico.

Pandl estimates tariffs have so far taken 2% off economic growth this year. But Liberation Day might actually stop the worst of the pain felt in financial markets. “If we see an announcement [on Wednesday] that is tough but phased, and focused on the 15 countries they seem to be targeting, my expectation is that markets will rally on that news,” Pandl told CoinDesk.

“Potentially once we get through this announcement, crypto markets can focus back on the fundamentals which are very positive.”Pandl said announcements like Circle’s IPO wouldn’t be happening if institutions didn’t have a high degree of confidence in the digital assets sector and the policies around it.

Moreover, Pandl, a former macro-economist at Goldman Sachs, believes that tariffs will increase the appetite for currencies that aren’t dollars.

“I think tariffs will weaken the dominant role of the dollar and create space for competitors including bitcoin. Prices have gone down in the short run. But the first few months of the Trump Administration have raised my conviction in the longer term for bitcoin as a global monetary asset.”

Pendl still believes that bitcoin will hit new all-time highs this year, despite current pessimism around prices. “I wouldn’t have quit my Wall Street job if I didn’t think bitcoin will be the winner in the long term,” he said.

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Stablecoin Giant Circle Files for IPO

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Circle, the U.S.-based stablecoin issuer, is going public.

The firm filed an S-1 form with the Securities and Exchange Commission (SEC) on Tuesday. If approved, the company’s stock will be trading on the New York Stock Exchange under the symbol «CRCL.»

The company said its reserve income from managing its stablecoin-related reserves was $1.7 billion at the end of 2024, representing 99.1% of its total revenue.

Circle is behind USDC, the second largest stablecoin by market capitalization, with $60 billion in supply. The firm’s IPO has been one of the most anticipated in crypto.

It’s not the only crypto-adjacent company looking to go public. Artificial Intelligence (AI) firm CoreWeave (CRWV), which benefits from a strong business relationship with bitcoin mining firm Core Scientific (CORZ), started trading on the public market on March 28.

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GameStop Has $1.5B of Bitcoin Buying Power After Closing Convertible Note Sale

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Bitcoin (BTC) purchases from video game retailer GameStop (GME) could be imminent or may have already begun after the company closed on its offering of $1.3 billion of five-year convertible notes.

The $200 million greenshoe option was fully exercised by the initial purchaser, bringing the total amount of the sale to $1.5 billion. Net proceeds to the company after fees were $1.48 billion, according to a filing Monday after the close of U.S. trading.

Alongside its fourth quarter earnings report last week, GameStop — led by its CEO Ryan Cohen — announced full board approval of an update to the company investment policy to add bitcoin to the GME balance sheet.

GME shares rose 1.35% during the regular session on Monday and are up another 0.8% in after hours action. Bitcoin remains modestly higher over the past 24 hours at $84,900.

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