M2 Capital Invests $20 Million in Ethena (ENA)

M2 Capital, the investment arm of UAE-based M2 Holdings, has invested $20 million in ENA, the governance token for Ethena, a crypto-native synthetic dollar protocol developed on the Ethereum blockchain.

M2 Holdings, a conglomerate with a focus on digital assets across custody, investment, and wealth management, intends to incorporate Ethena (ENA) products into its client services through its affiliate, M2 Global Wealth Limited, as announced on Thursday.

Strategic Investment for the Middle East

Kim Wong, managing director and head of treasury at M2 Holdings, stated, “M2’s investment in Ethena marks another important step forward for the Middle East’s most sophisticated digital asset investors.”

With this investment, Ethena joins M2’s expanding list of strategic ventures, which also includes a previous investment in the Sui (SUI) Foundation and support for Nasdaq-listed SUI Group Holdings through a private investment in public equity (PIPE) deal.

This announcement coincides with Ethena’s total value locked (TVL) reaching nearly $14.5 billion, based on data from DefiLlama. Over the past year, the protocol has amassed $666.82 million in fees, yielding $32.32 million in revenue and earnings.

Ethena’s innovative design combines crypto-backed collateral with delta-neutral hedging strategies, aiming to deliver a price-stable stablecoin called USDe and a yield-generating alternative known as sUSDe for its users.

As stated on its website, Ethena’s yield-bearing asset, sUSDe, is currently offering an annual percentage yield (APY) of 6%, a decrease from its 2024 average of 19%. The project has successfully attracted over 811,000 users across 24 blockchain networks.

In a related development, last week, YZi Labs, an investment firm linked to Changpeng “CZ” Zhao, increased its investment in Ethena to aid in the stablecoin’s growth. This strategy aims to scale USDe on BNB Chain and to fast-track the development of USDtb, a treasury-backed stablecoin, as well as Converge, Ethena’s institutional settlement layer for tokenized real-world assets.

Ethena’s upward momentum is occurring alongside renewed interest in crypto payment firms. On Thursday, it was reported that stablecoin payments company RedotPay secured a $47 million strategic investment round, propelling it into the category of fintech unicorns.