Bitcoin DeFi TVL Rises 2,000% Due to BTC Price, Adoption in 2024
Bitcoin-based decentralized finance applications have had a breakout year in 2024 following the April halving, with the industry’s value increasing 22x due to infrastructure developments and a surge in Bitcoin prices.
Bitcoin-based decentralized finance (DeFi), also known as BTCFi, is a new technology paradigm that aims to bring DeFi capabilities to the world’s first blockchain network.
The total value locked (TVL) of the Bitcoin (BTC) network has grown by more than 2,000% over 2024, from $307 million in January to $6.5 billion as of December 31, 2024, according to DefiLlama data.
Bitcoin TVL, 2024 – Chart. Source: DefiLlama
According to Binance Research, the 2,000% increase marked “a breakthrough for the sector.”
The increase is primarily due to increased development on Bitcoin staking and re-staking platform Babylon, which controls over 80% of TVL on BTCFi, Binance Research told Cointelegraph.
“The first phase of the mainnet was launched in August 2024, and the second phase of the testnet was launched in January 2025. “This is the main BTC DeFi dApp and during its launch, many users have likely deployed capital here to use it and potentially qualify for the airdrop.”
Babylon was seen as a significant opportunity for Bitcoin-based DeFi thanks to its introduction of Bitcoin native staking for the first time in cryptocurrency history.
Babylon TVL, historical charts. Source: DefiLlama
Babylon’s TVL soared 222% in two months, from $1.61 billion on October 22 to over $5.2 billion on December 31, 2024.
Interest in building DeFi capabilities on the Bitcoin network has been growing since the Bitcoin halving in 2024, which introduced the Runes protocol, the first fungible token standard on the Bitcoin blockchain.
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Bitcoin ETF and Soaring Crypto Values: Positive Impact on BTCFi
According to a Binance research report published on January 17, the debut of the U.S. spot Bitcoin exchange-traded fund (ETF) was “historically successful” and provided significant momentum to the Bitcoin price and Bitcoin DeFi movement. added.
Timeline of notable events in 2024. Source: Binance Research
ETF approval has attracted a new source of institutional demand for Bitcoin, which has helped the price of Bitcoin rise more than 121% over the past year and has contributed significantly to the growth of the BTCFi sector.
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Bitcoin surpassed its all-time high of $100,000 on December 5, just a month after Donald Trump won the 2024 US presidential election.
Bitcoin’s soaring value and growing popularity has led to more capital flowing into Bitcoin-based DeFi applications, Binance Research told Cointelegraph.
“This means that with the growth of the cryptocurrency market and advancements in technology and applications, users are investing more capital into Bitcoin applications.”
BlackRock, Fidelity, Grayscale, Bitcoin ETF AUM. Source: Binance Research
Flashing another optimistic signal about institutional adoption, the report revealed that BlackRock, the world’s largest asset manager, controls more than 50.3% of the total assets under management (AUM) among all Bitcoin ETF issuers.
Fidelity came in second, controlling more than 23.6% of the U.S. Bitcoin ETF market.
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