2024 marked a significant leap for applications within decentralized finance that are Bitcoin-based, particularly following the Bitcoin halving in April. This surge was largely attributed to a massive 22-times increase in industry value, fueled by rapid infrastructure development and escalating Bitcoin costs.
Bitcoin-powered Decentralized Finance (DeFi) – often referred to as Bitcoin DeFi or BTC DeFi – represents a cutting-edge approach designed to introduce decentralized financial services to the pioneering blockchain network of Bitcoin.
During the year 2024, the total value locked (TVL) in Bitcoin (BTC) experienced a staggering increase of more than 2,000%. Starting from $307 million in January 2024, it surged to over a billion and reached approximately $6.5 billion by December 31, 2024, according to DefiLlama data.
The 2,000% increase marks a “breakout year for the sector,” according to Binance Research.
The primary reason for the rise can largely be traced back to advancements in Bitcoin staking and re-staking platforms, particularly Babylon, which holds more than 80% of Total Value Locked (TVL) within the BTCFi ecosystem. According to Binance Research, this was reported to CryptoMoon.
“The first phase of their mainnet was launched in August 2024, and their stage 2 testnet in Jan 2025. Given this is a major BTC DeFi dApp and in the process of launching, many users have likely been deploying capital here to use it and potentially qualify for an airdrop.”
In cryptocurrency history, Babylon represented a major chance for Decentralized Finance (DeFi) based on Bitcoin, due to its pioneering introduction of Bitcoin’s first native staking system.
In just two months, from October 22nd to December 31st, 2024, the total value locked (TVL) in Babylon experienced a significant increase of approximately 222%, rising from $1.61 billion to over $5.2 billion.
The curiosity about developing Decentralized Finance (DeFi) functionalities on the Bitcoin network has been escalating ever since the 2024 Bitcoin halving event, which marked the advent of the Runes protocol – the pioneering fungible token standard on the Bitcoin blockchain.
Bitcoin ETFs and soaring crypto valuations: a net positive for BTCFi
According to a study released by Binance on January 17, the launch of US Bitcoin exchange-traded funds (ETFs) was remarkably successful, boosting the price and overall momentum of Bitcoin and the broader Decentralized Finance (DeFi) sector associated with it.
Approval of the ETF brought in a fresh wave of institutional interest towards Bitcoin, boosting its price by an impressive 121% last year, thereby substantially fueling the expansion of the Bitcoin Financial Sector.
On December 5th, Bitcoin reached an all-time high of over $100,000 – this remarkable feat occurred approximately a month following the conclusion of the 2024 U.S. Presidential Election with Donald Trump as the winner.
The increasing value and widespread acceptance of Bitcoin are drawing in more financial resources towards Decentralized Finance (DeFi) applications that are specifically designed for Bitcoin, as per Binance Research’s report to CryptoMoon.
“This, alongside the growth of the crypto markets and progress in technologies and applications, means that users have been deploying more capital into Bitcoin applications.”
The world’s leading asset manager, BlackRock, manages more than half (50.3%) of the combined assets in all Bitcoin ETFs available, offering a promising indication of institutional acceptance.
Fidelity is in second place, controlling over 23.6% of the US Bitcoin ETF market.
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2025-01-17 14:25