The last quarter of 2024 marked an increase in cryptocurrency mergers and acquisitions (M&A), signaling that the post-election sentiment shift could trigger 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 record high of 271 deals, signaling steady but contained growth, but there are signs that the record could be broken in 2025. With major institutions including BlackRock, Fidelity and Grayscale launches of 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 to drive 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 are not just about expansion, they are a clear signal that companies are looking to strengthen their offerings to meet the growing demands of institutional clients who want secure storage and robust risk management.
A lot of discussion has focused on pitting DeFi against TradFi, but 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, particularly 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. Although defi platforms are powerful, they 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 combine automated features like smart contracts, automated investment strategies, and risk management tools in a user-friendly interface. This approach simplifies the management of digital assets and ensures compliance without the usual complexity of blockchain technology. By using these tools, traditional financial institutions can more easily transition into the DeFi space, minimizing risk and maintaining control.
Composition as a catalyst for change
For builders and managers, consolidation takes care of 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 also happens in the decentralized space itself.
M&A plays a key role in creating composition in DeFi by enabling the consolidation of resources, technologies and expertise from multiple projects, which can strengthen interoperability between different protocols. Composition is the ability for different protocols and apps to integrate and work together, enabling users to build complex financial solutions and act as a catalyst for growth in the DeFi space. This increasing consolidation and merging of different protocols and resources allows developers 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 an excellent example of compounding and a key trend expected to grow in 2025. They earn stake rewards while also being used as liquidity or collateral, strengthening capital efficiency and maximizing the use of assets across the DeFi ecosystem.
The future of DeFi in 2025
The future of decentralized finance is bright. Established Ethereum protocols have consistently built and improved. These advances, combined with a more favorable regulatory environment and improved user experiences, set the stage for significant growth.
The future of decentralized finance lies in composition and interoperability. Networks shouldn’t be a barrier to investment, but navigating them can sometimes be complex. Simplified interfaces that bridge the complexities of multiple networks allow users to focus on opportunities rather than technical barriers.
As M&A activity continues, crypto firms will need 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 rising expectations of investors and developers.
