Bitcoin DeFi Could ‘ Unlock Billions in BTC Liquidity ‘: Binance Report

The fast-moving, dangerous world of fragmented finance—or DeFi—is what could soon make Blockchain” HODLers” more wealth on their investment, according to new research from Binance. &nbsp,

A Thursday report from the world’s biggest crypto exchange says that using Bitcoin, the biggest and oldest cryptocurrency, on DeFi protocols is a “large untapped opportunity” and has the “potential to unlock billions in dormant BTC liquidity and enhance Bitcoin’s capital efficiency” .&nbsp,

Only about 0.79 % of bitcoin is in use for DeFi, the report noted. &nbsp,

Cryptocurrency is a transaction network originally created to take cash anywhere in the world at any time. But it is now mostly sold —especially since the approval of area ETFs in the U. S. last year—as “digital silver”: an inflation wall against collapsing assets.

That’s why a lot of investors hold—or” HOD L” in crypto speak—the asset for years ( with many seeing large returns. ) &nbsp,

Binance says that using the crypto in DeFi may help investors make even more cash. &nbsp,

” Bitcoin’s architecture was not designed to support complicated financial programs”, Thursday’s report reads, adding that with DeFi apps, “BTC buyers today have greater flexibility to set their Bitcoin to work—whether by using it as collateral for financing, lending it out for offer, or engaging in organized items”.

This may work as engineers work on growing programs in the DeFi area that are appropriate with Bitcoin—especially since the Securities and Exchange Commission scrapped the Staff Accounting Bulletin ( SAB) No. 121 under the fresh crypto-friendly Trump Administration. &nbsp, &nbsp,

DeFi allows individuals to do things through blockchain technology that conventional economic items already do: use, lend, or make offer. &nbsp,

Such programs are usually built on Ethereum, the next biggest crypto system. Cryptocurrency on DeFi has existed for some time but has never really caught on, Binance documents. &nbsp,

Today, though, just like gold and treasuries are used in traditional financial markets, Bitcoin should be “more successful” as its base grows and more Layer-2 networks become available to enable Bitcoin investors to put their money to function, Binance says. &nbsp,

The DeFi world is experimental and the industry has been plagued by hacks and scams, with investors losing huge amounts of money over the years. &nbsp,

” Unlike traditional DeFi users, BTC holders have historically prioritized security, self-custody, and long-term value preservation over active capital deployment”, the report said. “BTCFi applications will need to align with these preferences”.

The report added that if protocols in development are” successful, DeFi is coming to Bitcoin—and by leveraging the security and resilience of the original blockchain, BTCFi stands to be a sector worth watching closely”.