Why Bitcoin DeFi Protocols Are Seeing Impressive Growth As BTC Soars

Key Points

1. Bitcoin-based DeFi protocols' total value locked (TVL) surged from $304.66 million in January 2024 to $7.117 billion by mid-2025.

2. Institutions are increasingly seeking BTCFi strategies, with Bitcoin being recognized as collateral, as seen with the rapid bridging of 5,000 sBTC on the Stacks network.

3. Stablecoins like USDT and UST0 are enabling Bitcoin DeFi growth, with protocols such as Rootstock seeing increased usage and support from major platforms.

4. Despite Bitcoin's price reaching new highs, Bitcoin DeFi growth has been slower, increasing by only about 8% YTD, due to challenges like cautious user behavior and the 'buy and hold' mindset.

5. New technologies like BitVM3 are emerging to enable more flexible and scalable smart contracts on Bitcoin, potentially opening the door for Ethereum-style applications without compromising Bitcoin's core principles.