Bitcoin DeFi Gains Traction Amid Major Institutional Support

Bitcoin-based decentralized finance (BTCFi) had a transformative year in 2024, fueled by the April halving, surging Bitcoin prices, and major infrastructure developments.

The sector’s total value locked (TVL) skyrocketed from $307 million in January to over $6.5 billion by year-end, marking a remarkable 2,000% increase, according to recent data.

A major driver of this growth was Babylon, a Bitcoin-native staking platform that introduced groundbreaking functionality for Bitcoin DeFi. Following its mainnet launch in August, Babylon saw its TVL rise dramatically, reaching $5.2 billion by December. This surge in adoption underscored the platform’s role as a cornerstone of BTCFi innovation.

The introduction of the Runes protocol, enabling fungible tokens on Bitcoin, further expanded the network’s DeFi capabilities. Meanwhile, the approval of U.S. Bitcoin spot ETFs added institutional momentum, pushing Bitcoin’s price to a record high of over $100,000 in December, just after Donald Trump’s presidential win.

Institutional giants like BlackRock and Fidelity played a significant role, managing a majority of Bitcoin ETF assets and fueling confidence in the sector.

With BTCFi evolving rapidly, 2024 solidified Bitcoin’s role not only as a store of value but also as a foundation for decentralized finance. These advancements have positioned Bitcoin-based DeFi for continued growth and broader adoption in the years ahead.