As the Dubai Token2049 conference concludes, a key to remember is that the story around Bitcoin (BTC) is developing rapidly beyond its traditional value reserve role to a potential active challenge in competition with Ethereum and Solana.
Eminent industry players like Franklin Templeton consider this evolution as a positive, confident step that it will improve the usefulness of Bitcoin without diluting its basic attraction as a value store that purists or maximalists fear.
“I do not think that focusing on Bitcoin Defi will dilute or complicate the main story of Bitcoin,” said Kevin Farrelly, director general of Blockchain Venture Capital in Franklin Templeton and vice-president of digital assets, during his opening speech during the Bitlayer side event this week. “Instead, it extends the usefulness of Bitcoin for a specific type of investor – one with sufficient technical sophistication to optimize the personalized return, safety or wallet needs.”
“These users do not replace the thesis” Store of Value “; they rely on it,” added Farrelly. “It is not a narrative dilution, it is the evolution of infrastructure.”
Franklin Templeton is an investor in Bitlayer, a Bitvm which serves as a Bitcoin calculation layer while preserving the safety of the Mainnet. It offers features such as the treatment of faster transactions, lower costs and new features such as intelligent contracts or advanced challenge integrations, areas that basic basic bitcoin does not support.
The FNB Bitcoin by Franklin Templeton (EZBC) has recorded net entries of $ 260 million since its inception on January 11 of last year. As of May 1, the fund held 5,213 BTC, or more than $ 500 million assets under management at the current Bitcoin price of just over $ 97,000.
Expansion beyond the value of value store
The original vision of Satoshi Nakamoto for Bitcoin blockchain was motivated by the creation of a decentralized financial system which promotes financial sovereignty and privacy, eliminating the need for transaction intermediaries. More than a decade since its creation, however, the native cryptocurrency of blockchain, Bitcoin, quickly acquired a reputation of digital gold – a reliable reserve of value – and this story served it.
Bitcoin market capitalization today exceeds $ 1.9 billion of dollars, which represents almost 60% of the total market value of digital assets of 3.12 billions of dollars, according to Coindesk data. It is the most liquid cryptocurrency, on average several billion dollars in daily negotiation volumes worldwide, and several listed companies have adopted it as a reserve asset.
In addition, several regulated alternative alternative investment vehicles have emerged over the years, allowing traditional market players to exhibit cryptocurrency.
For example, according to Farside Source of Data investors, the 11 Spot ETF listed in the United States have raised nearly $ 40 billion in investors since their beginnings in January of last year. Meanwhile, ETF Ethers have seen net entries of just under $ 3 billion.
The strong institutional absorption of BTC has been largely attributed to its simple and convincing story in digital gold – an easy to understand asset compared to complex platforms like Ethereum or Solana. These platforms support a wider range of decentralized financial applications (DEFI) (DEFI), helping their native token holders to obtain additional yields in addition to their market holdings.
“Basically, it is considered a digital value store of value,” Farrelly told Coindesk. “Unlike more complex crypto projects, Bitcoin does not require a deep technical explanation – it has a clear and concentrated objective. This clarity can be part of what facilitates understanding, easier to model and with ETF, easier to allocate.” In a landscape full of complexity and speculative stories, he continued.
Consequently, many purists resist the idea of introducing characteristics similar to Defi directly on the Bitcoin blockchain, fearing to dilute its main attraction.
The buzz around Bitcoin DEFI during the Bitlayer event and the main TOKEN2049 conference were tangible, highlighting the growing demand among BTC holders for additional return opportunities.
“Bitcoin DEFI with a minimized confidence bridge, durable performance products for ONCHAIN Bitcoin holders becomes very important for Bitcoin asset holders and network managers,” said Charlie Yechuan Hu, co-founder of Bitlayer in Coindesk.
“At Bitlayer, we build significant infrastructure that can empower Bitcoin DEFI with our BitVM technologies,” added HU. “Many interesting use cases of Bitcoin Defi can make assets Bitcoin more precious, give users more reasons to hold and use in the future”
This BTC Defi trend could also benefit minors, who are rewarded for mining blocks. Although the block reward is half reduced every four years, an increase in activity on the chain driven by DEFI applications could help compensate for this reduction thanks to higher transaction costs, supporting the safety and sustainability of the network.
“Above all, Bitcoin DEFI also introduces new transaction costs – an essential element of long -term sustainability and security of the network while block awards continue to drop,” said Farrelly.
Hu expressed a similar opinion, saying that the growing network hashrate means that minors need more activities, such as Bitcoin Defi, to remain profitable.
“We would need to build a good Rollup Bitcoin with a safety verification capacity, which can bring costs to Bitcoin,” noted Hu.
