Bitcoin-based decentralized finance applications had a bumper year in 2024 following the April halving, with the sector’s value increasing 22-fold, driven by infrastructure development and Bitcoin’s price surge.
Bitcoin-based decentralized finance (DeFi), also known as BTCFi, is a new technological paradigm that aims to bring DeFi capabilities to the world’s leading blockchain network.
The Total Value Locked (TVL) in Bitcoin 
BTCUSD The network saw an increase of more than 2,000% in 2024, from $307 million in January to $6.5 billion on December 31, 2024, according to data from DefiLlama.
The 2,000% increase marked a “breakthrough year for the industry,” according to Binance Research.
The increase is primarily attributed to growing developments around Bitcoin staking and replenishment platform Babylon, which controls over 80% TVL in BTCFi, Binance Research told Cointelegraph:
“The first phase of their mainnet launched in August 2024 and their phase 2 testnet in January 2025. Since this is a major BTC DeFi dApp and currently launching, many users have probably deployed capital here to use it and potentially qualify for an airdrop.
Babylon has been seen as a significant opportunity for Bitcoin-based DeFi, thanks to the introduction of native Bitcoin staking for the first time in crypto history.
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 developing DeFi capabilities on the Bitcoin network has increased since the 2024 Bitcoin halving, which introduced the Runes protocol – the first fungible token standard on the Bitcoin blockchain.
Bitcoin ETF and crypto valuations on the rise: a net positive for BTCFi
According to a Binance research report released on January 17, the debut of spot Bitcoin exchange-traded funds (ETFs) in the United States was a “historic success,” adding significant momentum to the Bitcoin price and broader movement. of Bitcoin DeFi.
The ETF approval attracted a new source of institutional demand for Bitcoin, which allowed the price of Bitcoin to increase by more than 121% last year, significantly contributing to the growth of the BTCFi sector .
Bitcoin surpassed the all-time high of $100,000 on December 5, just a month after Donald Trump won the 2024 US presidential election.
Bitcoin’s skyrocketing valuation and growing popularity has attracted more capital into Bitcoin-native DeFi applications, Binance Research told Cointelegraph:
“This, alongside the growth of crypto markets and advancements in technologies and applications, means users have deployed more capital into Bitcoin applications. »
In another optimistic sign for institutional adoption, the report reveals that the world’s largest asset manager, BlackRock, controls more than 50.3% of total assets under management (AUM) among all ETF issuers Bitcoin.
Fidelity is in second place, controlling over 23.6% of the US Bitcoin ETF market.
