Bitcoin DeFi Explodes With Over 2,000% Growth

Decentralized finance on Bitcoin (BTCFi) is experiencing unprecedented expansion, with a total value locked (TVL) jumping from $307 million to $6.5 billion in 2024. This spectacular growth occurs against the backdrop of the successful launch of Bitcoin ETFs and the historic crossing of the $100,000 mark.

A Turning Year for DeFi on Bitcoin

The decentralized finance sector on Bitcoin underwent a major transformation in 2024. The Babylon platform, the cornerstone of this revolution, established itself as the undisputed leader by capturing over 80% of the sector’s total TVL.

Its launch in August 2024, followed by the deployment of its phase 2 in January 2025, marked a decisive stage by introducing native Bitcoin staking for the first time. Babylon’s TVL thus recorded a staggering growth of 222% in just two months, rising from $1.61 to $5.2 billion.

This growth was catalyzed by the implementation of the Runes protocol post-halving, establishing the first standard for fungible tokens on the Bitcoin blockchain. The thus strengthened technical infrastructure has opened the way for a new era of financial innovation on the network.

The success of BTCFi is also explained by the rise of the native DeFi movement, which managed to capitalize on the robustness and inherent security of the Bitcoin network.

The Catalytic Effect of ETFs and the Rise of BTC

The historic approval of spot Bitcoin ETFs in the United States played a crucial role in this expansion. BlackRock, the world’s largest asset manager, now dominates the market with 50.3% of assets under management, followed by Fidelity, which holds 23.6%. This institutionalization of BTC has propelled its price to unprecedented highs, surpassing $100,000 in early December 2024.

The victory of Donald Trump in the U.S. presidential elections also contributed to strengthening the confidence of institutional investors. This convergence of favorable factors has created a virtuous circle, attracting more and more capital towards the native DeFi applications of Bitcoin.

According to Binance Research, the approval of spot Bitcoin ETFs played a crucial role in this dynamic, contributing to an appreciation of over 121% of BTC during the year.

This institutional legitimization, combined with technological advancements and the development of applications, has created a virtuous cycle favoring the massive deployment of capital in the BTCFi ecosystem.