Bitwise launches non‑custodial on‑chain vaults with Morpho targeting 6% APY
Bitwise has launched its first on‑chain, non‑custodial curated vaults in partnership with DeFi lending protocol Morpho, marking the asset‑manager’s move into on‑chain yield products. The initial vault is USDC‑focused and allocates deposits into Morpho’s over‑collateralized lending pools; Bitwise manages curation, strategy and risk while users retain custody of funds. The product targets roughly a 6% APY depending on market conditions and supports unlocked deposits and withdrawals. Portfolio manager Jonathan Man, CFA, will lead strategy and oversight, leveraging Bitwise’s research, trading and risk infrastructure. Bitwise characterises these vaults as an “ETF 2.0” model and says it plans further on‑chain offerings in its roadmap. Morpho framed the deal as a milestone for its infrastructure positioning — the protocol has integrated curated vaults with partners such as Kraken’s DeFi earn and has seen TVL fluctuate in recent periods. Key implications for traders: increased institutional on‑chain demand for lending and yield strategies may boost borrowing and lending flows on Morpho and partner platforms, support token utility and liquidity tied to those ecosystems, and raise the profile of institutional DeFi products, potentially affecting short‑term fund flows into USDC and lending markets.
Bullish
The launch is likely bullish for assets and tokens tied to Morpho and the broader DeFi lending ecosystem. Institutional-grade, non‑custodial vaults from a major asset manager increase on‑chain demand for lending markets and could channel sizable deposits into USDC lending pools managed via Morpho. That should raise borrowing and lending flows, improve protocol utility and liquidity, and increase on‑chain fee generation — all of which support positive sentiment for Morpho’s ecosystem tokens and counterpart platforms. In the short term, trading may see inflows into USDC and related lending instruments and greater demand for on‑chain yield products; volatility could rise as funds move and allocations are tested. Over the longer term, successful product rollout and adoption by institutions would sustain higher TVL and recurring yield demand, reinforcing a bullish structural case. Risks that temper the outlook include execution missteps, adverse rate or credit conditions reducing APY, and broader crypto market selloffs, which could limit immediate price upside.