Why Onchain Vaults Are Following Stablecoins Everywhere

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Not every big institution that gets crypto exposure or goes onchain wants their name in a headline. And though many prefer to operate quietly, they’re still looking for exposure opportunities. As things pick up for crypto, many institutions are searching for the next edge through major asset management firms’ products. 

“There are several trillion-dollar banks that have approved Bitwise products in the last six months,” Hunter Horsley, co-founder and CEO of Bitwise Asset Management, told me recently on the Talking Tokens podcast. Just last week, a major bank approved one of Bitwise’s ETFs for exposure, he added. 

But even as banks roll in, the only one that has allowed Bitwise to publicly name them was PNC last February when it invested in the Bitwise Bitcoin ETF (BITB). 

That’s why Horsely thinks “the opportunity set in crypto is large” under the hood.  

ETFs are fairly well known, but the hottest new strategy that investors want to get their hands on is vaults, an onchain lending strategy that provide yield opportunities.

Bitwise, which manages more than $15 billion in assets and offers a suite of over 40 investment products, has recently seen “some very large institutional clients who want more complex things to be done,” Horsley said. 

At the end of January, Bitwise launched its first strategy in the vault category with Morpho, enabling its investors to access DeFi opportunities. 

“The main reason that [people] care about vaults these days is because they're using stablecoins, and they're increasingly parking their stablecoins in different places,” Horsley said. 

While stablecoins can generate zero yield or nominal percentage points of growth, many investors still want the option to get higher yields with money they have sitting around. This brings vaults into the conversation, as this strategy can sometimes generate yields of 4% to 6%. 

Horsley is betting vaults will become increasingly more popular as more investors come into the market. “I think you'll see them follow the journey of adoption of stablecoins.” 

This will be beneficial to individuals, similar to how high-yield savings accounts operate, as well as to institutions looking for different solutions. 

“The way in which vaults will be powerful on the institutional side is if you can really calibrate them to exactly what they want,” Horsley said. 

While vaults aren’t new, they have proliferated over the past two years. Now, they're popping up more frequently in conversations with neobanks and fintechs that want to integrate them. And as stablecoins continue to gain traction and investor interest, Horsley believes there will be an intuitive desire to leverage vaults and tap into yields or other strategies. 

And as institutions come onboard, the rates people will be willing to pay to borrow stablecoins onchain may be different than what they pay to borrow dollars from a community bank or borrow elsewhere. “So I think for that reason, it’s also going to become important to institutions because sometimes it may be the best rate and unique risk.”

Check out the next section for more details and the full episode.

For today’s episode, I interviewed Hunter Horsley, co-founder and CEO of Bitwise Asset Management, about the firm’s launch of onchain vault strategies with Morpho and latest Q4 2025 corporate adoption report of bitcoin and ethereum as well as his outlook on digital asset treasuries.

Hunter explains what vaults are, why they're following the adoption curve of stablecoins, and how they enable 4-6% yields, while investors maintain custody.

He walks through Bitwise's expansion beyond ETFs into staking, options strategies, and DeFi vault curation, why institutions are going from "0 to 500 miles per hour" on crypto, and what the corporate bitcoin adoption numbers reveal.

The conversation covers the “honeymoon phase” wearing off for treasury companies, the investor relations role DATs play in the ecosystem, why two-thirds of financial institutions will be in crypto within 6 months, and the shift from the "tell me era" to the "show me era" in institutional adoption.

TIMESTAMPS:

00:00 – Intro
01:05 – What are onchain vaults and why is everyone talking about them
02:04 – Bitwise x Morpho vault announcement
02:32 – Why people care about vaults: stablecoins parking and earning yield
03:00 – Vaults following stablecoin adoption and doubled in assets last year
03:20 – How institutional investors should think about vault risk vs traditional fixed income
05:10 – Real world assets hitting $20 billion and stablecoins reaching $300 billion
05:35 – Onchain lending rates differ from traditional bank rates
05:50 – Why Bitwise is expanding beyond ETFs into onchain yield strategies
06:48 – Major banks approving Bitwise ETFs in last 6 months
07:52 – Bitwise staking several billion dollars for clients and running bitcoin strategies
08:49 – Building a team that managed $2 billion of DeFi strategies
09:42 – Where vault opportunities are going as traditional firms enter the space
11:10 – Massive fintechs integrating stablecoins and vaults by end of year
11:50 – Q4 2025 corporate bitcoin adoption report key findings
13:00 – 19 new public companies bought Bitcoin in Q4
14:05 – Figma put 4% of balance sheet into bitcoin through Bitwise ETF
15:30 – His 9-minute call with an AI company that put bitcoin on the balance sheet
16:20 – Ethereum holdings: Bitmain, SharpLink, and EtherMachine
16:50 – Treasury companies post-honeymoon phase will look very different by year-end
18:05 – Why the world doesn't need a million treasury companies
18:32 – DATs and investor relations roles that crypto protocols lack
20:43 – How many treasury companies can exist per major asset
22:07 – Institutions buying more crypto AND becoming more crypto native
23:00 – Moving from "tell me era" to "show me era" for crypto
24:50 – Banks going from 0 to 500 miles per hour on crypto
26:23 – Two-thirds of financial institutions will be in crypto within 6 months
26:49 – January 2026 is the most bullish moment in Bitwise's 8 years

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Please note this content is for informational and educational purposes only. Any views shared should not be considered financial advice, nor should it be used to make investment decisions. Cryptocurrencies are high risk and you should consult a financial professional before making any financial decisions. Make sure you do your own research. We may have a direct or indirect financial interest in content mentioned in this newsletter.