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A Bitcoin (
$0.00 ) layer-2 executive explained how Bitcoin ( $0.00 ) narratives that were “overhyped” have now wholly vanished while the ecosystem develops.
In a Cointelegraph interview, Bitlayer co-founder Charlie Hu laid out three Bitcoin ( $0.00 ) narratives that he believed were overhyped. This included narratives that surrounded Ordinals, layer-2s and re-staking.
According to Hu, one of the overhyped narratives in Bitcoin ( $0.00 ) was non-fungible tokens (NFTs). The executive told Cointelegraph that while inscriptions may have gone “to the moon,” Hu said the era is “completely gone.”
CryptoSlam data shows that in the first quarter of 2024, Bitcoin ( $0.00 ) NFTs had a volume of $1.4 billion. In 2025 Q1, the volume is only at $280 million, showing an 80% drop. The executive believes that the 1,000x days of Bitcoin ( $0.00 ) NFTs may be over and that people can’t expect similar “crazy” price performances anymore.
Are Bitcoin ( $0.00 ) layer-2s running out of steam?
Apart from Bitcoin ( $0.00 ) NFTs, Hu told Cointelegraph that the hype around Bitcoin ( $0.00 ) layer-2 and Bitcoin ( $0.00 ) re-staking has also declined among venture capitalists.
Hu told Cointelegraph that at least 80 layer-2 networks aimed to get funded at the beginning of 2024 when the layer-2 narrative was strong. The executive said many projects pitched their ideas to investors, the media and different communities. Hu said that while there was some hype, this was “definitely over.”
Many other crypto executives and entrepreneurs resonate with Hu’s point of view about the dying hype around layer-2 ecosystems. On Feb. 20, Stacks co-founder Muneeb Ali said the “honeymoon phase” for Bitcoin ( $0.00 ) layer-2s is over. The executive said that most projects will cease to exist as their initial excitement fades.
Meanwhile, Hu also told Cointelegraph that a third “overhyped” narrative was Bitcoin ( $0.00 ) re-staking. Hu told Cointelegraph that at the moment, there are only 2 to 3 projects still surviving after the peak of the narrative’s hype phase in 2024.
While some hyped narratives started to fade, Hu believes there are many things to look forward to in the growing Bitcoin ( $0.00 ) ecosystem. The executive said that while layer-2s are a great narrative, they see it more as an engine that powers Bitcoin ( $0.00 ) ’s decentralized finance (DeFi) ecosystem, which could allow holders to explore yield opportunities. Hu told Cointelegraph:
“ Bitcoin (
Related: Bitcoin ( $0.00 ) volatility hits 3.6% amid heightened market uncertainty
Bitcoin ( $0.00 ) DeFi is yet to take off
Meanwhile, Dominik Harz, the co-founder of hybrid layer-2 Build on Bitcoin ( $0.00 ) (BOB), told Cointelegraph that Bitcoin ( $0.00 ) layer-2s should be seen as a long-term play.
“Looking at Bitcoin ( $0.00 ) Layer-2s through a short-term lens misses the point. Hype cycles come and go, but lasting developments in crypto, like Bitcoin ( $0.00 ) itself, are inherently long-term plays,” Harz said.
The executive also believes that Bitcoin ( $0.00 ) DeFi has not yet reached its full potential. “ Bitcoin ( $0.00 ) DeFi hasn’t even really taken off yet. We’re very early. Only 0.3% of Bitcoin ( $0.00 ) ’s market cap is active in DeFi right now compared to 30% for Ethereum (
$0.00 ) ,” Harz told Cointelegraph.
Harz pointed out this was a 100x discrepancy, saying it would decrease rapidly as Bitcoin ( $0.00 ) DeFi explodes. The executive also said layer-2s are necessary technological advancements for Bitcoin ( $0.00 ) DeFi to hit the market.
Max Sanchez, the chief technology officer of layer-2 protocol Hemi Labs, also believes that Bitcoin ( $0.00 ) layer-2s are not losing steam.
The executive told Cointelegraph that the space is entering a maturation phase where fundamentals matter. Sanchez said that many early projects in the Bitcoin ( $0.00 ) layer-2 space brought technology from Ethereum ( $0.00 ) without adapting it to Bitcoin ( $0.00 ) ’s unique architecture “in a way that truly extends Bitcoin ( $0.00 ) .”
Sanchez, who works on a hybrid project connecting to Ethereum ( $0.00 ) , also said that building a layer-2 in just one silo and forgoing interoperability with Ethereum ( $0.00 ) -based protocols is a “false notion.”
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