Bitcoin’s decentralized finance (DeFi) ecosystem is experiencing renewed enterprise capital (VC) curiosity, signaling extra demand for the world’s first cryptocurrency because it good points utility as a yield-bearing asset.
Bitcoin DeFi, or BTCFi, is a technological paradigm that seeks to carry decentralized finance capabilities to Bitcoin’s base layer.
Based on a brand new report from Bitcoin DeFi infrastructure supplier Maestro, shared with Cointelegraph, the BTCFi ecosystem acquired $175 million value of VC funding throughout 32 rounds within the first half of 2025, with more and more extra capital flowing into shopper apps and demand-driven merchandise.
Capital is pivoting towards “usability and demand-driven merchandise, whereas infrastructure bets mature within the background,” the report stated, including that 20 of the 32 offers had been focused towards DeFi, custody or shopper functions.
Extra VC funding could result in extra utility and yield-generating capabilities for Bitcoin (BTC), driving extra investor demand for the world’s first cryptocurrency.
Nonetheless, Maestro’s knowledge exhibits that whereas first-quarter funding hit $130 million, exercise slowed within the second quarter, with simply $44 million raised throughout 12 offers, a 66% decline.
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DeFi and TradFi are converging within the BTCFi ecosystem
BTCFi and Bitcoin-denominated capital markets could turn into the convergence level of TradFi and DeFi, in line with Marvin Bertin, co‑founder and CEO of Maestro.
“For the primary time since 2009, the crucial items for on‑chain monetary apps on Bitcoin are in place, spanning exchanges, lending and stablecoins,” Bertin advised Cointelegraph, including:
“Bitcoin is evolving from a static reserve asset right into a dynamic, productive monetary community.”
Different trade watchers additionally famous an acceleration within the rising relationship between DeFi and TradFi. Improved infrastructure and rising collaboration between the 2 industries will make the substitute boundaries between the 2 sectors dissolve sooner than many anticipated, stated Nelli Zaltsman, head of blockchain funds innovation at JPMorgan’s Kinexys.
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BTCFi noticed a greater than 22-fold enhance in worth throughout 2024, as whole worth locked (TVL) rose by over 2,000%, pushed by infrastructure developments and hovering Bitcoin costs, Cointelegraph reported on Jan. 17.
Babylon was seen as a major alternative for Bitcoin-based DeFi, due to introducing Bitcoin-native staking for the primary time in crypto historical past.
Curiosity in constructing DeFi capabilities on the Bitcoin community has been rising for the reason that 2024 Bitcoin halving, which launched the Runes protocol, the primary fungible token commonplace on the Bitcoin blockchain.
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