Enthusiasm for Bitcoin in decentralized finance remains strong despite the stagnation of total value locked (TVL) since the start of 2025. Some experts attribute BTCFi’s growth to factors such as institutional investors seeking yield and the development of necessary infrastructure.
TVL Declining Across Protocols
In the last quarter of 2024, the total value of bitcoin in decentralized finance (BTCFi) surged from just over $800 million to $6.51 billion. At one point in December 2024, the total value locked (TVL) hit an all-time high before retreating and settling above $6 billion. Overall, the TVL spiked by over 2,000% between January and December, allowing Bitcoin to overtake Tron and become the third highest ranked in terms of TVL.
According to data from Defillama, the BTCFi value locked remained stagnant since the start of the year, with a peak TVL of $7.14 billion on Jan. 19. Since then, it has slowly declined and was around $6.58 billion at the time of writing (Feb. 13, 12:00 p.m. EST). This prompted some to suggest that the BTCFI narrative may have run its course.
However, data indicates that the decline in TVL appears to be a trend across all protocols. Ethereum, which has the highest TVL, saw its value drop from a peak of almost $77 billion to $57.34 billion. The next highest ranked platform, Solana, which peaked right after U.S. President Donald Trump’s inauguration, has similarly experienced a gradual decline.
Despite the drop in BTCFi’s total value locked, enthusiasm for its upward trajectory remains strong. Galaxy Digital predicts that 2.3% of Bitcoin’s circulating supply could be bridged into BTCFi by 2030—around $47 billion—which has some Bitcoin enthusiasts convinced that Bitcoin decentralized finance is still in its early days. These sentiments are echoed by experts contacted by Bitcoin.com News, including Tristan Dickinson, CMO of Exsat Network.
“The 2,000% surge in BTCFi TVL is just the beginning. With the increasing performance of Bitcoin ETFs, price rallies, and advancements in staking technology, we’re seeing unprecedented growth. As bitcoin’s TVL potential remains largely untapped, expect BTCFi to claim a much larger share of total defi TVL in the coming years,” Dickinson asserts.
BTCFi’s Total Value Locked Projected to Triple in 2025
Mithil Thakore, co-founder and CEO at Velar, attributes the growth of BTCFi to several factors, including institutional investors seeking yield on their BTC holdings while maintaining ownership for long-term growth. They are exploring new opportunities beyond ETFs. The simultaneous building of the necessary infrastructure for BTCFi, including improved exchanges, tokenization methods, and bitcoin staking solutions, increases the prospects of further TVL growth.
“BTCFi still accounts for only a portion of the decentralized finance economy by TVL, but its market share is only going to increase as the incentives and opportunities available within Bitcoin’s DeFi ecosystem expand,” Thakore told Bitcoin.com News.
Kyle Ellicott, an executive director for the Stacks Asia Foundation, expects the total value locked in BTCFi to triple in 2025. He said:
While still in its early stages, from mid-August to year-end, staking protocols alone activated more than 62,000 previously idle bitcoins, driving the overall industry’s expansion from more than $300 million in 2023 to $6.5 billion (0.33% of Bitcoin market capitalization) by year-end. This rapid growth in yield-generating infrastructure warrants close attention as the sector matures in 2025, with analysts, including myself, predicting a more than threefold increase by year’s end.
Luke Xie, co-founder and CEO of Satlayer, said as the BTCFi ecosystem develops, the total value locked will grow substantially. This growth, he said, is driven by the desire to leverage Bitcoin’s strong security and liquidity for new decentralized applications.
