BTCFi TVL jumps 22x to $7B, but trust remains an issue
BTCFi TVL soared from $304 million to $7 billion in 2024 — driven by new protocols and institutional inflows — but trust, risks, and infrastructure hurdles still hinder adoption.
Bitcoin-based decentralized finance (DeFi), often referred to as BTCFi, is experiencing significant growth but still faces challenges.
According to DefiLlama data, Bitcoin-based (BTC) DeFi protocols’ total value locked (TVL) went from $304.66 million on Jan. 1, 2024, to $6.5 billion by Dec. 31, 2024. As of publication, DefiLlama data shows that BTCFi has a TVL of $7.05 billion.
This translates to an increase of more than 22 times. A report shared by Bitcoin smart contract layer Arch Network suggests that “this surge was fueled by new protocol launches, emerging token standards, institutional inflows, a major price rally pushing BTC to an all-time high, and the rise of liquid restaking.”