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Starknet’s recent announcement to settle on Bitcoin and Ethereum signifies a pivotal moment for the burgeoning BTC DeFi landscape.
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This innovative step aims to revolutionize DeFi by creating low-cost transaction pathways and merging two leading blockchain ecosystems.
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In the words of Starknet, “Starknet will become the first L2 to settle on both Bitcoin & Ethereum, bringing the two largest blockchain ecosystems on a single layer, unlocking new DeFi opportunities and greater liquidity.”
Starknet’s integration of Bitcoin into DeFi could unlock unprecedented opportunities, with projections indicating a market potential of $300 trillion.
Unlocking BTC DeFi: A New Era of Growth
The potential of Bitcoin’s DeFi sector remains largely untapped, especially with Starknet’s ambitious plans to facilitate this integration. As of early 2025, the total value locked (TVL) in BTC DeFi was approximately 68,000 BTC (about $5.3 billion), showcasing both current interest and significant room for growth.
Despite experiencing a small decrease from its all-time high of 73.2K BTC in January 2025, the BTC DeFi ecosystem demonstrated remarkable resilience, rising from 48,000 BTC last December to its current levels—a growth of 43%. This positive trend reinforces investor confidence in BTC DeFi.
Currently, leading platforms like Babylon, Lombard, SolvBTC, and the Lightning Network dominate the BTC DeFi sector, yet the entry of Starknet could significantly shift the landscape.
Source: DeFiLlama
The surge in interest towards BTC DeFi could potentially increase its TVL even more. Crypto venture capitalist Dan Held emphasized the sector’s vast untapped potential, predicting it could reach a staggering $300 trillion market size. He articulated his vision succinctly, stating, “If DeFi could be unlocked on Bitcoin, it would be by far the biggest opportunity ever to happen in crypto.”
He regarded Starknet’s progress as a ‘huge’ development for BTC DeFi growth, with expectations it could significantly alter the existing market dynamics.
In a discussion on the Supply Shock podcast, Held projected that BTC DeFi could gradually absorb market share from established platforms like Ethereum and Solana, thereby enhancing Bitcoin’s dominance.
Strategic Integration and Future Outlook for BTC
As Starknet prepares to introduce federated bridges for Bitcoin assets, it awaits the OP_CAT soft fork, designed to bolster Bitcoin’s smart contract functionality. The intersection of these innovations suggests a promising future for DeFi on Bitcoin.
While the full effects of this DeFi renaissance on BTC’s price remain to be seen, the groundwork laid by Starknet and the increasing engagement in BTC DeFi point toward a transformative phase for the crypto sphere.
Conclusion
In conclusion, Starknet’s initiative to unify Bitcoin and Ethereum under one settlement layer holds the potential to revolutionize BTC DeFi. With influential voices in the crypto sphere suggesting a remarkable growth potential, the importance of monitoring developments in this sector cannot be overstated. As innovations continue to emerge, investors and enthusiasts alike should remain vigilant to capitalize on this evolving landscape.
