Unveiling the 2024 Bitcoin Phenomenon: What Sparked an Unprecedented 2,000% Explosion in BTCFi?

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The year 2024 marked a significant surge in Bitcoin-based decentralized finance (DeFi), known as BTCFi, which expanded more than 22-fold. This impressive growth was primarily driven by advancements in Bitcoin staking, the introduction of spot Bitcoin exchange-traded funds (ETFs) in the United States, and a significant rise in Bitcoin prices.

Data from DefiLlama indicates that the total value locked in Bitcoin DeFi skyrocketed over 2,000%, soaring from $307 million in January to more than $6.5 billion by the year’s end. Industry experts called 2024 a “breakout year” for the sector, primarily due to the success of the Bitcoin staking and restaking platform, Babylon. This platform, which claimed over 80% of BTCFi’s total value locked, launched its mainnet’s first phase in August and a subsequent testnet phase in January 2025. Babylon provided an unprecedented opportunity in the realm of Bitcoin-native staking and saw its total value locked increase by 222% in just two months.


Interest in Bitcoin’s DeFi applications has steadily climbed since the April 2024 Bitcoin halving, which introduced the Runes protocol, the first fungible token standard on the Bitcoin blockchain. Furthermore, the launch of the US spot Bitcoin ETFs was a historic success that infused new institutional interest into the market, attributing considerably to Bitcoin’s price, which rose by over 121% over the year. Bitcoin reached a record high of $100,000 on December 5, bolstered further by the outcome of the U.S. presidential election.

A significant portion of the institutional adoption in Bitcoin ETFs is controlled by major asset managers, with BlackRock commanding over 50.3% of the total assets under management in this space, and Fidelity holding the second-largest share at 23.6%. These developments underscore the growing institutional acceptance and integration of Bitcoin into mainstream financial systems, fueling the BTCFi sector’s rapid expansion.