Bitcoin is now valued at over $100,000 per coin. Many people see it as a key financial asset that can create new wealth opportunities.
Recently, Elastos, a provider of Web3 infrastructure, raised $20 million to enhance decentralized finance (DeFi) services for Bitcoin (BTC). This investment, announced on January 30, came from Rollman Management Digital, a global investment network known for backing early blockchain projects like Ripple and Ethereum. Elastos is now among Rollman’s top five holdings.
Elastos plans to launch its Bitcoin DeFi protocol in the second quarter of 2024. This will allow users to use their BTC as collateral and access Ethereum smart contracts for various DeFi activities, such as swapping tokens. Elastos is not alone in this effort. Other companies, like Stacks, RSK, and Babylon, are already working to bring DeFi capabilities to the Bitcoin network.
Meanwhile, Binance has expanded its Bitcoin DeFi offerings by introducing BTC staking with Babylon. As of January 30, the total value locked in Bitcoin DeFi applications exceeds $7.2 billion, according to DefiLlama.
There’s a growing demand for Bitcoin-focused financial services, especially after the approval of spot Bitcoin exchange-traded funds (ETFs) in early 2024. Currently, US Bitcoin ETFs hold more than $124 billion in net assets, as reported by CoinGlass.
After a brief slowdown, ETF buying pressure picked up again in early January. This surge was largely driven by expectations of a pro-crypto administration under Trump. Additionally, the nomination of Paul Atkins, a pro-crypto advocate, as chair of the US Securities and Exchange Commission is expected to positively impact the industry, attracting more investors. Clearer regulations could encourage investors to explore DeFi applications more confidently.
The increasing institutional adoption of Bitcoin is likely to lead to new and innovative DeFi strategies that use Bitcoin as collateral. Jacob Phillips, co-founder of the BTC staking protocol Lombard, emphasizes this potential.