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The over 22-fold increase is mainly attributed to Bitcoin staking developments, the launch of spot Bitcoin ETFs in the US and BTC’s soaring prices during 2024.
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Bitcoin-based decentralized finance applications saw a breakout year after in 2024 after April’s Bitcoin halving, with the industry’s value experiencing an over 22-fold increase driven by infrastructure development and soaring Bitcoin prices.
Bitcoin-based decentralized finance (DeFi), also known as BTCFi, is a new technological paradigm that aims to bring DeFi capabilities to the world’s first blockchain network.
The total value locked (TVL) in Bitcoin (BTC) saw an over 2,000% increase during 2024, from $307 million in Jan. 2024, to above billion to over $6.5 billion on Dec. 31, 2024, DefiLlama data shows.
Bitcoin TVL, 2024-chart. Source: DefiLlama
The 2,000% increase marks a “breakout year for the sector,” according to Binance Research.
The increase is mainly attributed to growing developments around Bitcoin staking and restaking platform Babylon, which controls over 80% of TVL in BTCFi, Binance Research told Cointelegraph:
“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.”
Babylon was seen as a significant opportunity for Bitcoin-based DeFi, thanks to introducing Bitcoin-native staking for the first time in crypto history.
Babylon TVL, all-time chart. Source: DefiLlama
Babylon’s TVL soared 222% in two months, from $1.61 billion on Oct. 22, to over $5.2 billion on Dec. 31, 2024.
Interest in building DeFi capabilities on the Bitcoin network has been growing since the 2024 Bitcoin halving, which introduced the Runes protocol — the first fungible token standard on the Bitcoin blockchain.
Related: Stacks Asia partners with HEX Trust for $180B Bitcoin DeFi opportunity
Bitcoin ETFs and soaring crypto valuations: a net positive for BTCFi
The debut of the US spot Bitcoin exchange-traded funds (ETFs) was “historically successful,” adding significant momentum to Bitcoin price and the wider Bitcoin DeFi movement, according to a research report by Binance, published on Jan. 17.
Timeline of notable events in 2024. Source: Binance Research
The ETF approval attracted a new source of institutional demand for Bitcoin, which helped Bitcoin’s price rise over 121% last year, significantly contributing to the growth of the BTCFi sector.
Related: Stacks’ smart contracts reach record high ahead of Nakamoto upgrade
Bitcoin surpassed the $100,000 record high on Dec. 5, just a month after Donald Trump won the 2024 United States presidential election.
Bitcoin’s soaring valuation and growing popularity have invited more capital in Bitcoin-native DeFi applications, Binance Research told Cointelegraph:
“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.”
BlackRock, Fidelity, Grayscale, Bitcoin ETF AUM. Source: Binance Research
Flashing another optimistic sign for institutional adoption, the report revealed that the world’s largest asset manager, BlackRock, controls over 50.3% of the total assets under management (AUM) among all Bitcoin ETF issuers.
Fidelity is in second place, controlling over 23.6% of the US Bitcoin ETF market.
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This article first appeared at Cointelegraph.com News
