As the Dubai Token2049 conference concludes, one of the key conclusions is that the narrative around Bitcoin (BTC) is expanding rapidly beyond its traditional role as a reserve of value for a possible defi asset that competes with Ethereum and Solana.
The prominent actors in the industry such as Franklin Templeton see this development as a positive step, surely that Bitcoin’s usefulness will improve without diluting its central attraction as a value reserve as purists or maximalists fear.
“I do not think that focusing on Bitcoin Defi Diluya or will complicate the central narrative of Bitcoin,” said Kevin Farrelly, managing director of Blockchain Venture Capital in Franklin Templeton and VP of digital assets, explained during his opening speech at the Side Bitlayer event this week. “On the other hand, it expands Bitcoin’s utility for a specific type of investor, one with sufficient technical sophistication to optimize personalized performance, safety or needs.”
“These users are not replacing the thesis of ‘value warehouse’; they are based on it,” Ferally added. “It is not a narrative dilution, it is the evolution of infrastructure.”
Franklin Templeton is an investor in Bitlayer, a bitvm that serves as the Bitcoin computational layer while preserving Mainnet’s security. It offers characteristics such as a faster transaction processing, lower rates and new functionalities such as intelligent contracts or advanced defi integrations, areas that Bitcoin of base layer by itself is not compatible natively.
Bitcoin ETF (EZBC) of Franklin Templeton has registered net tickets of $ 260 million since its debut on January 11 of last year. As of May 1, the Fund had 5.213 BTC, more than $ 500 million in assets under administration at the current price of Bitcoin just above $ 97,000.
Expanding beyond the value for value warehouse
The original vision of Satoshi Nakamoto for the Bitcoin block chain was promoted by creating a decentralized financial system that promotes financial sovereignty and privacy, eliminating the need for transaction intermediaries. However, more than a decade since its inception, the native cryptocurrency of the blockchain, Bitcoin, has quickly generated a reputation as a digital gold, a reliable value warehouse, and this narrative has served it well.
Bbitcoin market capitalization exceeds $ 1.9 billion today, representing almost 60% of the total digital asset market value of $ 3.12 billion, according to Coindesk data. It is the most liquid cryptocurrency, with an average of several billions of dollars in daily negotiation volumes worldwide, and several companies that quote on the stock market have adopted it as a reserve asset.
In addition, several regulated alternative investment vehicles linked to BTC have emerged over the years, allowing traditional market participants to take exposure to cryptocurrency.
For example, according to the investors of the data source, the 11 ETF spot contained in the United States have accumulated almost $ 40 billion in investor money since their debut in January last year. Meanwhile, ETFs of ether have seen net tickets of just under $ 3 billion.
The solid institutional absorption for BTC has been widely attributed to its simple and convincing narrative as digital gold, an asset that is easy to understand in relation to complex platforms such as Ethereum or Solana, which admit a broader variety of decentralized finance applications (Defi) and use cases, which helps its native tokens holders to gain additional trucks on their market frames.
“In essence, it looks like a digital value store,” Farrelly told Coindesk. “Unlike the most complex cryptographic projects, Bitcoin does not require a deep technical explanation: it has a clear and focused purpose. That clarity can be part of what makes it easier to understand, easier to model, and with the ETF, easier to assign.”
As a result, many purists resist the idea of introducing similar characteristics to defi directly into the Bitcoin block chain, for fear that Bitcoin’s central appeal could dilute.
The rumor around Bitcoin Defi at the Bitlayer event and the main conference of Token2049 was tangible, highlighting the growing demand among BTC holders for additional performance opportunities.
“Bitcoin Defi with the minimized trusted bridge, sustainable performance products for Bitcoin’s headlines are becoming very important for Bitcoin assets and networks of networks,” said Charlie Yechuan Hu, co -founder of Bitlayer A Coindeesk.
“In Bitlayer we are building important infrastructure that can empower Bitcoin defi with our bitvm technologies,” Hu added. “Many interesting use cases of Bitcoin Defi can make Bitcoin assets more valuable, giving users more reasons to maintain and use in the future”
This BTC Defi trend could also benefit miners, which are rewarded by mining blocks. Although the block reward is reduced by half every four years, the increase in activity in the chain driven by the defi applications could help compensate for this reduction through higher transaction rates, supporting the safety and sustainability of the network.
“It is important to note that Bitcoin Defi also introduces new transaction rates, a critical component for the sustainability and long -term safety of the network as block rewards continue to decrease,” Farrelly said.
Hu expressed a similar opinion, saying that the hashrate of the rising network means that miners need more activities, such as Bitcoin Defi, to remain profitable.
“We would have to build a good accumulation of Bitcoin with security verification capacity that can contribute to Bitcoin rates,” Hu said.
