Bitcoin L2 infrastructure scaled 7x from 2021 to November 2024. Recent: Bitcoin DeFi TVL up 2,000% amid bumper 2024 for BTC price, adoptionMore importantly, it has accounted for a sizable share of new liquidity flowing into BTC, besides institutional products like exchange-traded funds (ETFs). Even if the supply of Bitcoin in BTCfi platforms and sidechains grows by 0.25% annually, the sector will have a total addressable market of $44 billion to $47 billion by 2030, according to Galaxy Digital.
The primary driver of this shift is the rise of Bitcoin DeFi (BTCfi), which looks beyond the mere store-of-value use cases. In 2024, Bitcoin (BTC) became a natively yield-generating asset and the centerpiece of Ethereum-style decentralized finance ecosystems.2025 is when that kindling can grow its flame on innovative Bitcoin sidechains. Most past attempts to tap Bitcoin’s value as a productive asset required significant changes to its base layer.
While solutions like WBTC have been suitable for some, many Bitcoin holders prefer not to entrust custodians with their capital or rely on chains like Ethereum, which do not align with Bitcoin's consensus principles or support the network at all. BTCfi, defined by Bitcoin-aligned and Bitcoin-powered infrastructure, is a solution from which both WBTC users and Bitcoin purists can benefit.
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Author / Journalist: Cointelegraph by Brendon Sedo
The story "Bitcoin sidechains will drive BTCfi growth" has 949 words across 52 sentences, which will take approximately 4 - 8 minutes for the average person to read.
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