Decentralized finance on Bitcoin (BTCFi) is experiencing unprecedented expansion, with total value locked (TVL) jumping from $307 million to $6.5 billion in 2024. This spectacular growth takes place in a context marked by the successful launch of Bitcoin ETFs and the historic crossing of the $100,000 mark.
A pivotal year for DeFi on Bitcoin
The decentralized finance sector on Bitcoin has undergone a major transformation in 2024. The Babylon platform, the cornerstone of this revolution, has established itself as the undisputed leader by capturing more than 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 milestone by introducing native bitcoin staking for the first time. Babylon's TVL thus recorded a dazzling increase of 222% in just two months, going from 1.61 to 5.2 billion dollars.
This growth was catalyzed by the implementation of the post-halving Runes protocol, establishing the first standard for fungible tokens on the Bitcoin blockchain. The strengthened technical infrastructure has paved the way for a new era of financial innovation on the network.
The success of BTCFi explains itself also by the rise of the native DeFi movement, which was able to capitalize on the robustness and security inherent in the Bitcoin network.
The catalytic effect of ETFs and the rise of BTC
The historic approval of spot Bitcoin ETFs in the United States has been instrumental 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 heights, exceeding $100,000 at the beginning of December 2024.
Donald Trump's victory in the US presidential elections also helped to strengthen the confidence of institutional investors. This convergence of favorable factors has created a virtuous circle, attracting ever more capital to Bitcoin-native DeFi applications.
According to Binance Research, the approval of spot Bitcoin ETFs played a key role in this dynamic, contributing to an appreciation of more than 121% in BTC over the year.
This institutional legitimization, combined with technological advances and application development, has created a virtuous circle favoring the massive deployment of capital into the BTCFi ecosystem.
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