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As we begin a new year, there is no doubt that 2025 will be remembered as the year of institutional adoption in crypto. In 2024, crypto returned to the public limelight in a more positive way, with BTC prices doubling for the second consecutive year in 2024, and Microstrategy closing the largest equity fundraising in history and becoming the most actively traded US stock in Q4.
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The incoming Trump administration has filled his cabinet with a number of crypto-friendly nominations, ushering in a year of long-awaited reforms and regulatory clarity on crypto policies.
A quick recap of some of the highlights of this year. The January launch of spot BTC ETF opened the floodgates for mainstream participation, and we have built on that momentum with the expansion into ETH ETFs, ETF options, and spot futures since. IBIT recorded the 3rd largest inflows amongst all US ETFs in 2024 with over $26B in inflows, while professional hedge funds, asset managers, and corporate institutions were reported to be large buyers of MSTR's most recent and oversubscribed convertible issuance. The bull is here and we expect the new wave of institutional adoption in the new year will be led by DeFi.
In particular, we expect DeFi to start playing a more integral role in our conventional finance system, especially in the areas of stablecoin integration, tokenization, on-chain custody, and financial disintermediation.
DeFi has endured a long period of ups and downs since the 'summer of 2020', with the current protocols significantly more robust and institutional-grade than the earlier cohorts. We believe that mainstream investors will be positively surprised and impressed with the ease of access, wide choice of financial products, execution transparency, and custody benefits on-chain. We have already started to see asset managers and centralized exchanges embracing various 'yield farming' solutions in DeFi, and this will no doubt be a major focus area going forward given the world's continued thirst for income solutions.
We also believe financial innovations in DeFi will help elevate the crypto industry to a new height. The growth of options and structured products will be a particularly exciting area, given attractive volume-selling returns and a long-term decline in BTC volatility as institutional adoption accelerates. The need for DeFi's structured product protocol is more important than ever.
Looking ahead, we are hopeful that blockchain will be as prevalent and integrated into our financial systems as the internet backbone is with our daily lives, offering the average user unfettered access and valuable product solutions as originally envisioned in the early days of DeFi. The future has never been more exciting for us DeFi builders, with 2025 promising to be the start of a golden era of DeFi adoption across the financial landscape.
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Augustine Fan is an experienced professional with over two decades of distinctive track records across Wall Street, Family Offices, Private Equity, and now crypto. Along with his current leadership efforts at SOFA.org, he also serves as Partner & CFO of SignalPlus, a leading digital asset software technology for crypto optionscPrior to joining crypto, Augustine worked for a decade at Goldman Sachs as a US interest rates trader and macro specialist in NY, London, Tokyo, and HK offices. Following his time on Wall Street, he joined a significant shipping-based family office in HK to help manage one of the most active secondary macro trading portfolios in Asia. He further refined his investment acumen as the CIO for another HK-based family office, with a deeper focus on private equity, credit, real estate, listed vehicles, and frontier investments.
