Bitcoin Staking & DeFi A $200B Market Potential

Several industry insiders told Cointelegraph that as institutional Bitcoin BTC$95,291 adoption accelerates and its Bitcoin staking DeFi potential ecosystem matures, Bitcoin-native decentralized finance (DeFi) will be one of the most talked-about topics in 2025. According to two of the CEOs, Bitcoin staking has a large addressable market that might potentially be worth hundreds of billions of dollars.

Staking Rewards reports that as of December 30th, Bitcoin staking commands around $5.5 billion in TVL. According to Bitwise’s head of research, Matt Hougan. Everything aligns for Bitcoin staking being a significant market,” as reported by Cointelegraph. The demand for Bitcoin yield is high, according to Hougan. It’s still appealing, even at a 3% yield compared to other choices.

According to Hougan, the market potential for Bitcoin staking is $200 billion. Cointelegraph was informed by Alexei Zamyatin, co-founder and CEO of Build on Bitcoin, that the total value locked (TVL) of Bitcoin DeFi might potentially expand by around 300 times.According to Zamyatin, several significant Bitcoin DeFi users and funds have expressed interest in putting their Bitcoin assets to work and earning yield.

Purchase a Ledger and receive $10 worth of Bitcoin. Get it now at a price only available on Cointelegraph! The entire crypto sector should be reinvigorated in 2025, said Dean Tribble, CEO of layer-1 network Agoric, speaking to Cointelegraph on how Bitcoin’s all-time high will generate increased interest in crypto from institutions and authorities alike.

There are several procedures that stand to gain the most. According to Hougan, institutions view Babylon, an L2 scaling network for Bitcoin, and EigenLayer, an Ethereum restaking protocol that accepts Wrapped Bitcoin WBTC$98,143.13 as collateral, as valid.

Hougan made the observation that, Even from a high-level perspective. The technology appeared acceptable. According to DefiLlama data, Babylon’s TVLs exceeded $5 billion as of December 30th, while Eigenlayer’s TVLs exceeded $15 billion. When you stake Bitcoin, you lock Bitcoin as collateral to protect Bitcoin L2s. In return, you get rewards. Tokens that have already been staked can be “restaked” to secure additional protocols at the same time.

Valour’s Bitcoin-Staking ETF Debuts

Valour, an asset manager, debuted a Bitcoin-staking exchange-traded fund (ETF) in Europe in November. As of December 30th, the APR for this product, which is staked to Core, a Bitcoin L2, was 5.65% according to Valour’s website. Bitcoin exchange-traded funds (ETFs) in the US cannot be staked at this time. In contrast to Hougan’s statement about the possibility of staked Bitcoin making it into an ETF structure in Europe, the former is uncertain about its prospects in the US.

Bitcoin Staking Fuels DeFi Growth

The proliferation of liquid staking tokens (LSTs), which reflect claims on staked BTC, opens the door to more intricate Bitcoin staking DeFi potential use cases. According to Staking Rewards, Bitcoin LSTs are worth more than $2.5 billion in total TVL as of December 30.

Sovryn and other all-in-one platforms, decentralized exchanges.  And lending protocols are already part of Bitcoin-native DeFi ecosystems hosted by RSK, Merlin, and Stacks, three Bitcoin L2s. As an added bonus, Merlin promotes Surf, a system for Bitcoin derivatives.

According to Jacob Phillips, co-founder and head of strategy of the Bitcoin staking protocol Lombard. Novel DeFi strategies will emerge across the risk curve with Bitcoin as a collateral asset. These strategies will range from simple buy-and-hold strategies with yield-bearing Bitcoin assets to basis trades and options strategies as discussed by Cointelegraph.

Bitcoin Staking Global Reserve Potential

Phillips thinks that Bitcoin’s DeFi ecosystem will help it become the reserve currency of the world as it develops. Phillips predicted that the Bitcoin staking rate would eventually become the ‘risk-free rate. Effectively turning it into a benchmark for DeFi lending and borrowing and inverting the US Treasury bill rate.

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