Bitcoin News Today: Bitcoin DeFi TVL Surges 2,196% in 18 Months

Bitcoin decentralized finance (DeFi) has experienced a remarkable surge in total value locked (TVL), increasing by 1,971.7% over an 18-month period from January 2024 to July 2025. The TVL rose from $307 million in January 2024 to $6.5 billion by December 2024, and then settled at $6.36 billion as of early July 2025. As of the latest data, the TVL stands at $7.049 billion, marking a 2,196% increase since December 2024.

Several key factors have driven this surge, including the launch of new protocols, the introduction of novel token standards, growing institutional inflows, a rally that pushed BTC to an all-time high, and the rise of liquid restaking. Ethereum has traditionally been the leader in DeFi due to its smart contract capabilities and strong developer ecosystem. However, a new wave of developers is now bringing DeFi to Bitcoin, attracted by its security, untapped liquidity, institutional interest, and increasing user demand for composable financial tools. Layer 1 innovations and protocols are also unlocking Bitcoin’s native programmability, positioning it as the next frontier in DeFi.

Many in the industry view Bitcoin as the next DeFi frontier, with the potential to even outpace Ethereum. As this momentum grows, Bitcoin’s role as a foundational layer for DeFi is becoming increasingly undeniable. According to Matt Mudano, CEO and co-founder of Arch Network, “Bitcoin’s true potential lies beyond being a passive store of value. As a $2 trillion asset, unlocking its liquidity to build a truly open and permissionless financial system on its base layer is the next frontier. Bitcoin DeFi is the greatest opportunity not only for crypto, but for financial innovation as a whole.”

The report also highlighted various use cases for Bitcoin, with 36% of respondents holding BTC in cold storage, 33% trading on centralized exchanges, and 31% using it for payments. Additionally, 29% use BTC as DeFi collateral, 22% for bridging, 20% in Bitcoin-native DeFi, and 28% as liquidity provision. Among those who do not use BTC in DeFi, 36% cited a lack of trust, and 25% mentioned risk and fear of loss. Other reasons included technical barriers, user experience, and regulation. Interestingly, 16% simply prefer to hold their BTC, while the same percentage waits for better infrastructure. Only 11% do not see clear benefits, suggesting that most concerns can be addressed rather than indicating a lack of interest in leveraging Bitcoin more actively.

Geographically, the majority of respondents are in Asia (61%) and Africa (17%). The most popular DeFi activities among respondents include lending and borrowing protocols (55%), decentralized exchanges (DEXs) (51%), and stablecoins (40%). Builders are drawn to Bitcoin DeFi for its security and decentralization (44%), growing liquidity and ecosystem expansion (27%), long-term vision and community (26%), and the opportunity for Layer 2 innovation (20%). However, challenges remain, with 43% of respondents citing Bitcoin’s lack of support for complex smart contracts as the main issue. Other challenges include a lack of developer tools, poor documentation, low composability, and liquidity.

Despite these challenges, many developers are optimistic about the future of Bitcoin DeFi. Solutions to many of these issues include better infrastructure and broader Layer 2 adoption. Many developers also work on other chains like Ethereum, Solana, and Base, with 60% preferring other chains for smart contract flexibility and 33% for developer tools. However, 49% of responding developers working on other chains plan to switch fully to Bitcoin, while 39% will stay multichain, and 12% haven’t decided yet. This shift indicates a growing recognition of Bitcoin’s potential in the DeFi space and a willingness to overcome its current limitations.