DeFi
Hedge Fund Pantera Says It’s “Time to Seize This Moment” for $500 Billion Bitcoin DeFi Opportunity – DL News
- The new bull market has paved the way for a $500 billion Bitcoin opportunity, Pantera Capital said.
- The hedge fund said it is time for developers to unlock Bitcoin’s DeFi potential.
- Franklin Bi, partner at Pantera Capital, listed three developments that have boosted Bitcoin’s DeFi future.
Bitcoin Poised to Unlock $500 Billion Decentralized Finance Opportunity, Says Pantera Capital.
In a note to investors, the hedge fund said that while the world’s leading cryptocurrency hasn’t leveraged DeFi as much as its rival Ethereum, that could change as the market becomes more bullish.
“Technological advancements and macroeconomic trends are converging on a watershed moment for DeFi on Bitcoin,” Pantera Capital partner Franklin Bi said in a statement. note this week. “Now is the time to seize this moment. »
“Bitcoin’s era of neglect may finally be coming to an end,” Bi added.
The note comes as Bitcoin is once again trading at levels not seen since late 2021. It surpassed the $52,000 mark earlier in February.
The recent rise was driven by Wall Street’s adoption of cryptocurrency via spot bitcoin exchange traded fundsthe next reduce by half event in April, increased regulatory clarity and macroeconomic conditions, Pantera Capital wrote.
“[The] the convergence of these positives will provide strong tailwinds,” Dan Morehead, CEO of Pantera Capital, said in the note.
Bitcoin’s $450 Billion DeFi Opportunity
DeFi applications built on Bitcoin represent a “half-trillion dollar untapped opportunity,” Bi said.
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He extrapolated this figure from Ethereum, where DeFi applications, such as Uniswap – represent between 8 and 50% of the total value of Ethereum, Bi said.
This means that Bitcoin DeFi applications could end up being worth between $72 billion and $450 billion, according to Bi’s estimates.
He likely based his calculations on the total value of Bitcoin before it passed the $1 trillion mark on February 14.
According to Bi’s calculations, the top end of the total value of Bitcoin DeFi applications could now be worth over $500 billion, provided the value does not change.
Traders are already putting Paris that Bitcoin could break its all-time high price by June, with the most popular options contracts pointing to a price of $70,000.
Why Would Bitcoin DeFi Happen Now?
People have expressed interest in building DeFi solutions on Bitcoin in the past, but have been held back by the rigid nature of the blockchain, Bi wrote.
He listed three key developments that have energized Bitcoin’s DeFi future: The 2021 Taproot upgrade which increased the amount of data transactions can store, allowing ordinal registrations until January 2023.
This in turn led to BRC-20 tokens which were a type of ordinal enabling deployment, creation and transfer functionality, Bi said.
“The release of fungible and non-fungible assets launched the first waves of DeFi and NFT activity on Ethereum” in 2016 and 2017, Bi said, adding that he sees similar early signs “surfacing” in the ecosystem Bitcoin.
Additionally, the failure of centralized services like FTX, BlockFi, Celsius and Genesis has damaged an entire generation of investors’ trust in centralized financial services, which could lead them to seek new DeFi opportunities, Bi said .
“A decentralized financial system could finally emerge with Bitcoin as its basis,” Bi said. “Its potential is similar to or greater than that of DeFi on Ethereum today, although it follows a different evolutionary path.”
Eric Johansson is the editor-in-chief of DL News. Sebastian Sinclair is markets correspondent for DL News. Do you have any advice? Contact them at eric@dlnews.com And sebastian@dlnews.com.