BTCFi VC funding hits $175M as investors focus on consumer apps

2 weeks ago

Bitcoin’s decentralized concern (DeFi) ecosystem is experiencing renewed task superior (VC) interest, signaling much request for the world’s archetypal cryptocurrency arsenic it gains inferior arsenic a yield-bearing asset.

Bitcoin DeFi, oregon BTCFi, is simply a technological paradigm that seeks to bring decentralized finance capabilities to Bitcoin’s basal layer.

According to a caller study from Bitcoin DeFi infrastructure supplier Maestro, shared with Cointelegraph, the BTCFi ecosystem received $175 cardinal worthy of VC backing crossed 32 rounds successful the archetypal fractional of 2025, with progressively much superior flowing into user apps and demand-driven products.

Capital is pivoting toward “usability and demand-driven products, portion infrastructure bets mature successful the background,” the study said, adding that 20 of the 32 deals were targeted toward DeFi, custody oregon user applications.

More VC backing whitethorn pb to much inferior and yield-generating capabilities for Bitcoin (BTC), driving much capitalist request for the world’s archetypal cryptocurrency.

Still, Maestro’s information shows that portion first-quarter backing deed $130 million, enactment slowed successful the 2nd quarter, with conscionable $44 cardinal raised crossed 12 deals, a 66% decline.

DeFi and TradFi are converging successful the BTCFi ecosystem

BTCFi and Bitcoin-denominated superior markets whitethorn go the convergence constituent of TradFi and DeFi, according to Marvin Bertin, co‑founder and CEO of Maestro.

“For the archetypal clip since 2009, the captious pieces for on‑chain fiscal apps connected Bitcoin are successful place, spanning exchanges, lending and stablecoins,” Bertin told Cointelegraph, adding:

“Bitcoin is evolving from a static reserve plus into a dynamic, productive fiscal network.”

Other manufacture watchers besides noted an acceleration successful the increasing narration betwixt DeFi and TradFi. Improved infrastructure and increasing collaboration betwixt the 2 industries volition marque the artificial boundaries betwixt the 2 sectors dissolve faster than galore expected, said Nelli Zaltsman, caput of blockchain payments innovation astatine JPMorgan’s Kinexys.

BTCFi saw a more than 22-fold summation successful worth during 2024, arsenic full worth locked (TVL) roseate by implicit 2,000%, driven by infrastructure developments and soaring Bitcoin prices, Cointelegraph reported connected Jan. 17.

Babylon was seen arsenic a important accidental for Bitcoin-based DeFi, acknowledgment to introducing Bitcoin-native staking for the archetypal clip in crypto history.

Interest successful gathering DeFi capabilities connected the Bitcoin web has been increasing since the 2024 Bitcoin halving, which introduced the Runes protocol, the archetypal fungible token modular connected the Bitcoin blockchain.