Bitwise Takes the Reins: Vault Manager Role at Morpho Signals Institutional Crypto Shift

Bitwise just landed a heavyweight institutional role—vault manager for Morpho, the second-largest on-chain lending protocol. This isn't just a routine custody gig; it's a power move that bridges traditional asset management with DeFi's core infrastructure.

Why This Cuts Through the Noise

Forget vague partnerships. This vault manager appointment puts Bitwise directly in charge of securing and managing the collateral underpinning a top-tier lending pool. It's operational control, not just a branding exercise. Morpho's protocol doesn't just grow—it needs bulletproof, institutional-grade security to scale. Bitwise's play answers that call, signaling that serious DeFi is moving beyond DIY wallet management.

The Institutional On-Ramp Gets a Turbocharge

Think of this as laying railway tracks for bigger capital trains. A recognized name like Bitwise managing the vaults reduces a major friction point for funds and corporations eyeing DeFi yields. It addresses the 'who holds the keys?' question with a regulated, audited answer. This could unlock liquidity that's been sitting on the sidelines, wary of smart contract risks and custody complexities.

A Jab at the Old Guard

Let's be cynical for a second: traditional finance spends millions on legacy custody solutions that are, frankly, antiquated for digital assets. Meanwhile, in crypto, the top players are building and securing the financial infrastructure of tomorrow—and now hiring from the traditional world to do it. The irony is almost too rich.

This move isn't just a win for Bitwise or Morpho. It's a clear signal that the infrastructure for institutional DeFi is being built right now, by players who understand both the promise of permissionless finance and the non-negotiable demands of professional capital. The vault doors are swinging open.

Bitwise expects asset managers to double in 2026

Bitwise expects an ongoing shift in on-chain finance, and itself plans to expand into several types of yield strategies. The company with over $15B in client assets joined the rapidly growing Morpho, one of the leading lending protocols. 

Morpho offers programmable non-custodial infrastructure for fully on-chain lending and borrowing, with automated issuance and redemption. Vaults work similar to a portfolio of lending positions, explained Bitwise. 

“Decentralized finance, or DeFi, offers compelling yield opportunities, but the complexity of managing onchain risk has kept many investors on the sidelines,” said Jonathan Man.

“Bitwise provides value-add by layering professional guidance and risk management experience onto these non-custodial tools,” he said.

Paul Frambot, co-founder and CEO of Morpho, said the platform is ready for institutional-grade usage, enabling professional risk parameters that are implemented directly on-chain. Bitwise has recognized the value of diversified fixed-income strategies and vaults are becoming a building block of on-chain finance, added Frambot.

Morpho increased its liquidity in January

Morpho climbed the ranks of lending protocols, now standing only behind Aave. The protocol carries $6.72B in total value locked, with growth resuming in January. 

The protocol achieved high weekly fees of $7.28M, and is ranked 27th among all fee-producing apps.

Before Bitwise, Gauntlet and Steakhouse dominated the biggest vaults. Steakhouse brings in over 55% of value locked in Morpho vaults. Bitwise will face strong competition in attracting attention to its own new strategies, competing with seven other curators. 

Morpho has been seeking a competitive advantage in partnerships with other crypto leaders. In the past year, the BTC-backed lending vaults powered by Coinbase Smart Wallet increased their value locked. 

In total, $1.92B in BTC was deposited through Coinbase’s lending feature, becoming one of the key sources of growth for Morpho. The loans are over-collateralized, and the BTC-backed vaults have lent out over $1B. 

The effect of Bitwise may be similar, as the organization has a high profile and may draw in funds to its new vaults. Morpho has also added vaults to Kraken DeFi Earn, adding another high-profile source of lending and borrowing activity.

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