In years to come, 2025 may be viewed as the year in which the United States officially entered a pro-Bitcoin era. Last year’s approval of spot Bitcoin ETFs was one thing, enabling major asset managers to offer their clients direct exposure to BTC price movements without taking direct custody. But this year, there’s a crypto-friendly President in the Oval Office and talk of a strategic Bitcoin reserve (SBR). It’s safe to say we’re in uncharted territory.
Once a staunch critic of Bitcoin, President Trump’s volte-face on the subject was confirmed by an appearance at the world’s biggest Bitcoin conference in Nashville on the campaign trail, at the same event, Wyoming Senator Cynthia Lummis – a long-time Bitcoin advocate – called for an SBR, and since that day, sixteen states have apparently begun to consider allocating public funds to Bitcoin as part of their investment strategies.
At the governmental level, Bitcoin is on an upward trajectory. But the true opportunity in this environment extends beyond simply buying and hodling BTC in the pursuit of profit. After all, there’s a rapidly-growing Bitcoin ecosystem to think about…
BTCFi is Flourishing
While Bitcoin’s role as a store of value has dominated public discourse, its potential as a foundation for innovative decentralized applications (dApps) represents an even more significant opportunity.
Over the last 18 months, the network’s unparalleled security, achieved through Proof-of-Work (PoW) consensus, has provided a perfect foundation for a wave of next-gen dApps and protocols. In fact, the total value locked in Bitcoin-based DeFi (BTCFi) rocketed by 2,000% in 2024 – before Trump’s return to the White House was even confirmed. TVL now stands at $6.6 billion, a comparatively modest figure given the overall DeFi TVL is over $200 billion.
Given Bitcoin’s $2 trillion market cap, there is a huge amount of dormant liquidity that could be injected into the BTCFi space. If that’s not a carrot for enterprising entrepreneurs and Bitcoin developers, we don’t know what is.
Stacking Sats and Making Bitcoin Great Again
Launched in 2018 by Princeton-educated computer scientist Muneeb Ali, Stacks has emerged as the leading Bitcoin Layer-2 platform, with over $100 million currently locked in its ecosystem. As the only blockchain besides Bitcoin capable of reading Bitcoin state, the open-source L2 offers American entrepreneurs a unique proposition: the ability to build Bitcoin-native applications secured by 100% of the network’s hash power.
Practical applications of Bitcoin programmability are already evident in the diverse projects building on Stacks. Take DeFi protocol Velar, which last year raised $3.5m to build its suite of Bitcoin-based DeFi tools. Velar’s offerings include Bitcoin’s first perp DEX, a project launchpad, a cross-chain bridge, and liquidity provision. In addition, the project recently unveiled the BTC Name Grant Program to support the use of “.btc” identities on Stacks. The goal of the program is to improve on-chain transactions by reducing manual human errors.
Then there’s the Binance Labs-backed Zest Protocol, Stacks’ top lending platform with over $60 million TVL. Its innovative BTCz derivative, which enables users to earn BTC yield through the Babylon staking system, shows just how far Bitcoin DeFi has come in a short period. Arkadiko’s open-source protocol, meanwhile, lets users mint dollar-pegged stablecoins (USDA) collateralized by their assets, bringing MakerDAO-style functionality to BTCFi.
Collectively, these projects and others are adding considerable utility to a cryptocurrency formerly known as an inflation hedge. Make no mistake, proponents still consider Bitcoin the perfect antidote to rampant money printing; but now it and its network can be used for so much more: DEXs, CDPs, liquid staking, borrowing, and more.
What Next?
The convergence of improving regulatory conditions, political support, and technological innovation has created a veritable Bitcoin boom, one entrepreneurs would do well to recognize. As more U.S. states ponder Bitcoin-friendly policies, more institutions FOMO in, and Bitcoin’s L2 ecosystem expands, the value of building on the eponymous blockchain’s rails will only increase.
Just don’t call it a comeback, Bitcoin’s been here for years.
