Key points to remember:
- The total TVL value of Bitcoin DeFi in 2024 was over $6.5 billion, up from $307 million, an increase of 2,000%.
- Babylon’s Bitcoin staking platform outperformed all others, capturing over 80% of the entire BTCFi TVL.
- Additionally, US dollar-denominated Bitcoin ETFs and surging prices have reignited the flame among investors, attracting more capital into the Bitcoin DeFi space.
2024 will be remembered as a pivotal year for Bitcoin-based decentralized finance (BTCFi), the term that describes the sector. The Bitcoin industry has seen revolutionary progress after the April 2024 halving with total value locked (TVL) jumped 2,000% from $307 million to the $6.5 billion level. It is not just a passing fashion, it is no longer a market adjustment; this is the truth of people’s interaction with the world and that of Bitcoin due to the necessary shift from a primarily passive store of value to a dynamic store in the all-too-rapidly evolving DeFi environment.
The Dawn of Bitcoin DeFi: A Transformative Paradigm
BTCFi is the first significant discovery made in the technological genre that managed to form a link between the traditional BTC blockchain and new DeFi features. Bitcoin’s connection to DeFi functions allows it to act as more than just a transactional asset, so it can be used for staking, lending, and borrowing – actions that were previously performed on networks like Ethereum. The range of features such as high security and end-user control, along with the ease of use of Bitcoin, are some of the important reasons mentioned in the financial world why the coin is an irresistible choice in the ‘industry.
According to data from DefiLlama, Bitcoin’s TVL has reached $6.5 billion, the initial figure being $307 million. Binance Research called this 2,000% surge the “Holy Grail” of the industry and is a perfect example of how a small percentage of a stock can turn into a big change. The most important thing in this growth story is the numbers, but it’s Bitcoin’s adaptability and possibilities beyond the traditional story that really matters.
BitcoinTVL. Source: DéfiLlama
More news: What is Bitcoin DeFi?
Babylon: the unstoppable force of BTCFi
It is clear that the rise of Bitcoin staking platform Babylon is the most influential; however, it took a multitude of different causes to lead to this sudden increase. Babylon’s controversial staking mechanism, which, in addition to allowing users to bet on the app, ultimately resulted in its rejection, sparked enthusiasm among the crowd. Since Babylon first introduced it, it has become the largest TVL in the market, overall winning 80.6% of the market. Furthermore, Babylon’s first official announcement regarding the mainnet in August 2024 and the second testnet phase which will take place in January 2025 have encouraged enthusiastic users to register and thus participate in future airdrops to send a substantial part of their funds. to the DeFi space, a strategy generally used in the DeFi space.
Babylon TVL. Source: DéfiLlama
Just consider that Babylon’s TVL alone saw an exceptional increase of 222% in just two months, going from $1.61 billion as of October 22 to more than $5.2 billion as of December 31, 2024, an indication of when Bitcoin-based DeFi suddenly improved. Babylon’s growth is the perfect example of how identifying a strong need in an open market can lead a company to exceptional growth. No direct staking for bitcoins.
Bitcoin ETF and price surge: a synergistic force
The launch of US spot Bitcoin exchange-traded funds (ETFs) has significantly increased both the price of Bitcoin and adoption of DeFi, driving the explosive growth of the sector. The research report by Binance revealed that the introduction of these EFTs was not only a success but also a “historic success”, thus attracting a lot of new institutional capital, which had previously not been brief with direct ownership of Bitcoin.
Timeline of related events in 2024. Source: Binance Research
More news: Craze for Bitcoin ETFs: demand exceeds mining supply by 3 times
The resulting high interest allowed the Bitcoin price to make a breakthrough with a huge surge of over 121% in 2024. To top it all off, the price crossed the psychological threshold of $100,000 in December 2024 with much speculation, mainly after the US presidential election. the results have been published. This increase in the value of Bitcoin was indeed an important step in making Bitcoin an attractive and acceptable asset, and it also stimulated even more interest in Bitcoin’s native DeFi applications, attracting users who eagerly wanted to use their newly acquired assets in the growing ecosystem.
Looking Ahead: A Word of Caution
Bitcoin DeFi’s impressive growth in 2024 cannot be attributed to luck alone. It reflects the continued progress and maturity of the cryptocurrency industry, encompassing the transformation of Bitcoin from a basic digital asset to a sophisticated and flexible financial tool. Additionally, a stronger position is enhanced by the involvement of retail and institutional investors. This therefore signifies an encouraging direction for the future of BTCFi and the broader crypto space. Nevertheless, being one of the pioneering industries, it is of utmost importance to adopt an objective attitude towards it. The prospects are many, but potential users and investors should conduct thorough research, exercise caution and be aware of the possible dangers posed by these new developing sectors. While the journey has been exciting, it also requires careful navigation and careful decision-making.
