While the decentralized finance (DeFi) sector faces liquidity challenges and protocol shutdowns, large institutional investors are doubling down on crypto treasury companies like Bitmine Immersion Technologies. Despite a broader market sell-off, major players such as Morgan Stanley and Bank of America are increasing their stakes in Bitmine, signaling continued confidence in the crypto market’s long-term potential.
Wall Street Bets on Bitmine
The largest shareholders of Bitmine Immersion Technologies (BMNR) have significantly boosted their investments in the company, even as the broader crypto market tumbles. According to recent filings with the U.S. Securities and Exchange Commission, Morgan Stanley, the top reported holder, increased its position by about 26% to more than 12.1 million shares, valued at $331 million at the quarter’s end. ARK Investment Management, the second-biggest holder, raised its stake by about 27% to over 9.4 million shares worth $256 million.
Other institutional investors, including BlackRock, Goldman Sachs, Vanguard, and Bank of America, also increased their BMNR holdings. BlackRock’s holdings grew by 166%, Goldman Sachs by 588%, Vanguard by 66%, and Bank of America by 1,668%. These moves come despite a sharp 48% drop in Bitmine’s share price in the fourth quarter of 2025 and a 60% decline over the past six months.
DeFi Lenders Struggle with Liquidity
The DeFi sector continues to face significant challenges, with liquidity issues leading to the shutdown of several protocols. Decentralized lending platform ZeroLend announced it is shutting down due to low user numbers and liquidity on the blockchains it operates. Despite efforts to sustain the protocol, the team concluded that it is no longer viable in its current form. This follows a broader trend of DeFi protocols struggling with market volatility and user engagement.
ZeroLend’s founder, known as “Ryker,” shared the news on X, stating, “After three years of building and operating the protocol, we have made the difficult decision to wind down operations. Despite the team’s continued efforts, it has become clear that the protocol is no longer sustainable in its current form.”
Regulatory Milestones in DeFi
Amid the turmoil, DerivaDEX, a decentralized derivatives exchange, has achieved a significant regulatory milestone by launching its platform with a T license from the Bermuda Monetary Authority. This makes DerivaDEX the first DAO-governed DEX to operate under formal regulatory approval. The platform supports major crypto perpetual products and plans to expand into additional markets, including prediction markets and traditional securities.
DerivaDEX combines offchain order matching with onchain settlement to Ethereum, allowing users to retain non-custodial control of their funds. The T license, issued for a digital asset business seeking to test a proof of concept, signals a growing trend of DeFi platforms seeking regulatory clarity and compliance.
Market Volatility and Platform Closures
The crypto market’s volatility has also led to the closure of onchain analytics company Parsec. After five years of operation, Parsec announced it is shutting down, citing changes in crypto trader flows and onchain activity that no longer align with its business model. Parsec’s CEO, Will Sheehan, noted that the company’s focus on DeFi and non-fungible tokens (NFTs) fell out of step with the industry’s evolving landscape.
NFT sales reached about $5.63 billion in 2025, a 37% decline from the $8.9 billion recorded in 2024. Average sale prices also dropped year-on-year, falling to $96 from $124, according to CryptoSlam data. These trends highlight the ongoing challenges in the DeFi and NFT sectors as the market adjusts to new realities.
Tokenized Equities Gain Traction
Kraken’s tokenized equities platform, xStocks, has surpassed $25 billion in total transaction volume less than eight months after its launch. This significant milestone represents a 150% increase since November, when xStocks crossed $10 billion in cumulative transaction volume. The platform’s growth is driven by both centralized and decentralized exchange activity, as well as minting and redemption transactions.
xStocks tokens are issued by Backed Finance, a regulated asset provider that creates 1:1 backed tokenized representations of publicly traded equities and exchange-traded funds. Kraken serves as the primary distribution and trading venue, while Backed handles the structuring and issuance of the tokenized instruments. The platform’s success highlights the growing interest in tokenized assets and their integration into broader DeFi ecosystems.
Looking Forward
While the DeFi sector faces ongoing challenges, the actions of institutional investors and the regulatory advancements of platforms like DerivaDEX and xStocks suggest a more stable and compliant future. The crypto market’s volatility and the closure of some DeFi protocols underscore the need for robust liquidity solutions and regulatory frameworks. As the market continues to evolve, the focus will likely shift towards platforms that offer both innovation and regulatory compliance, setting the stage for a more mature and sustainable DeFi ecosystem.
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