Beyond digital gold: Bitcoin enters the DeFi world
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Beyond digital gold: Bitcoin enters the DeFi world

Jul 3, 2025
Beyond digital gold: Bitcoin enters the DeFi world Beyond digital gold: Bitcoin enters the DeFi world Video Thumbnail

By Karim AbdelMawla

Bitcoin (BTC) is widely seen as a store of value, often compared to digital gold. It hasn’t been known for doing much else, especially compared to other blockchains like Ethereum, which allow developers to build all kinds of apps on top of them.

But that’s starting to change.

In 2025, a new movement called Bitcoin Finance (BTC-Fi) is gaining momentum. It’s no longer just a side project; it’s becoming a major part of the crypto world.

Source: 21Shares, DeFiLlama. Data as of June 25, 2025.

One sign of this growth is the sharp rise in something called Total Value Locked, or TVL. This is a measure of how much money people have put into decentralized finance (DeFi) apps. These are apps that let users earn interest, trade assets, or lend money, all without traditional banks. 

BTC-Fi’s TVL has grown from just $30 million in early 2024 to nearly $10 billion by mid-2025. That means Bitcoin is becoming more than just a safe place to hold value; it’s becoming the foundation for a new kind of open financial system.

Here’s the most exciting part: Less than 2% of Bitcoin’s total market (worth about $2.1 trillion) is currently being used in DeFi. If even a small portion, just 5 to 10%, enters BTC-Fi, it could grow even bigger than Ethereum’s DeFi market today.

Why Bitcoin Finance (BTC-Fi) matters for investors 

BTC-Fi is a game-changer because it lets Bitcoin holders earn yield or passive income without needing to sell their Bitcoin.

That’s huge.

  • For investors and institutions, it means they can earn returns just by putting their Bitcoin to work.

  • For developers and the broader crypto community, it unlocks a new type of collateral: Bitcoin, the most trusted and widely held digital asset, is now usable in decentralized apps.

New platforms are making BTC-Fi possible

  • Babylon has brought nearly 49,000 BTC into its system for staking (a way to earn rewards).
  • Stacks has introduced smart contracts for Bitcoin and already secured over 5,000 BTC with its sBTC asset.
  • Solv Protocol is letting users create BTC-based yield products and has recently passed $500 million in value locked.
  • Maple Finance has brought institutional capital to BTC-Fi with its on-chain credit vaults and BTC yield offerings, now pushing toward almost $1.7 billion in TVL.
  • Threshold Network is using its version of Bitcoin (tBTC) in popular lending platforms like Aave.
  • B² Network is exploring ways to scale Bitcoin through rollups, bringing more users into the DeFi space.

DeFi is no longer just Ethereum’s game

What Ethereum built for other tokens, Bitcoin is now building for itself, without changing what makes it secure and reliable.

BTC-Fi is shaping the future of Bitcoin. It’s not hype. It’s a real shift that could define Bitcoin’s role in a more connected, multi-chain crypto world. If you hold Bitcoin, this is a development worth watching closely.

This report has been prepared and issued by 21Shares AG for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however, we do not guarantee the accuracy or completeness of this report. Crypto asset trading involves a high degree of risk. The crypto asset market is new to many and unproven and may have the potential not to grow as expected.Currently, there is relatively small use of crypto assets in the retail and commercial marketplace in comparison to relatively large use by speculators, thus contributing to price volatility that could adversely affect an investment in crypto assets. In order to participate in the trading of crypto assets, you should be capable of evaluating the merits and risks of the investment and be able to bear the economic risk of losing your entire investment.Nothing herein does or should be considered as an offer to buy or sell or solicitation to buy or invest in crypto assets or derivatives. This report is provided for information and research purposes only and should not be construed or presented as an offer or solicitation for any investment. The information provided does not constitute a prospectus or any offering and does not contain or constitute an offer to sell or solicit an offer to invest in any jurisdiction. The crypto assets or derivatives and/or any services contained or referred to herein may not be suitable for you and it is recommended that you consult an independent advisor. Nothing herein constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your individual circumstances or otherwise constitutes a personal recommendation. Neither 21Shares AG nor any of its affiliates accept liability for loss arising from the use of the material presented or discussed herein.Readers are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors.This report may contain or refer to material that is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject 21Shares AG or any of its affiliates to any registration, affiliation, approval or licensing requirement within such jurisdiction.

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