Bitcoin DeFi surge may boost BTC demand and adoption — Binance

The value locked in Bitcoin ( $80,321.00 ) -based decentralized finance (BTCFi) has surged by more than 2,700% over the past year, potentially transforming Bitcoin ( $80,321.00 ) from a passive store of value into a productive, yield-bearing asset, according to new research from Binance.

BTCFi is a new technological paradigm that aims to bring decentralized finance capabilities to Bitcoin ( $80,321.00 ) ’s base layer. It is one of the fastest-growing crypto sectors, reaching a total value locked (TVL) of over $8.6 billion.

The growing value of BTCFi, “along with potential interest rate cuts, may reinforce positive sentiment for Bitcoin ( $80,321.00 ) in the medium and long term,” Binance Research wrote in a report shared with Cointelegraph.

If the BTCFi sector’s growth trajectory continues, it could open up “new opportunities for Bitcoin ( $80,321.00 ) holders to generate yield through lending, liquidity provision, and other DeFi mechanisms,” a Binance spokesperson told Cointelegraph, adding:

“This may contribute to a shift in how BTC is perceived — from a passive store-of-value to a productive on-chain asset. While it’s too early to determine the full impact, these evolving use cases could support broader adoption and, over time, strengthen demand.”

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Interest in BTCFi surged after April 2024’s Bitcoin ( $80,321.00 ) halving, which introduced the Runes protocol, the first fungible token standard on the Bitcoin ( $80,321.00 ) blockchain.

Several Bitcoin ( $80,321.00 ) -native projects have helped accelerate the trend.

Babylon introduced Bitcoin ( $80,321.00 ) (BTC) staking for the first time in the network’s history, enabling holders to earn passive income from their assets.

Hermetica launched the first Bitcoin ( $80,321.00 ) -backed synthetic dollar, USDh, which debuted with a 25% yield for investors.

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BTC long-term holders resume Bitcoin ( $80,321.00 ) accumulation

Long-term Bitcoin ( $80,321.00 ) holders have restarted their BTC accumulation after the BTC supply held by long-term holders bottomed in February.

Long-term holders are wallets that have been holding BTC for at least 155 days. Growing accumulation from long-term holders has reduced the available Bitcoin ( $80,321.00 ) supply on exchanges, which may eventually lead to a supply shock-driven price rally.

The growing accumulation trend among long-term holders aligns with a “significant period of adoption for Bitcoin ( $80,321.00 ) ,” due to the establishment of the US strategic Bitcoin ( $80,321.00 ) reserve and growing institutional interest, according to the research report.

On March 7, US President Donald Trump signed an executive order to create a strategic Bitcoin ( $80,321.00 ) reserve using BTC seized from government criminal cases.

Trump signed the historic Bitcoin ( $80,321.00 ) reserve order a day ahead of hosting the first White House Crypto Summit, which received mixed reactions from the crypto community.

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