“By the end of the decade, more than $47 billion in liquidity could move to L2 solutions on Bitcoin. This assessment was shared by Galaxy Digital analysts in the Bitcoin L2s report. The study takes into account the market share of all wrapped Bitcoins in DeFi, native BTC in L2 networks, and BTC locked in staking protocols. According to the report, 0.8% of all coins in circulation are concentrated in these segments. According to analysts’ forecasts, after six years this figure will be 2.3%. “If bitcoin […]”, — write: businessua.com.ua
By the end of the decade, more than $47 billion in liquidity could move to L2 solutions on Bitcoin. This assessment was shared by Galaxy Digital analysts in the Bitcoin L2s report.
Research takes into account the market share of all wrapped Bitcoins in DeFi, native BTC in L2 networks, and BTC locked in staking protocols. According to the report, 0.8% of all coins in circulation are concentrated in these segments. According to analysts’ forecasts, after six years this figure will be 2.3%.
“If Bitcoin is worth $100,000 in 2030, the total market for L2 on Bitcoin could reach $47 billion, assuming that by 2030 in [них] 2.3% of the total BTC supply will be blocked,” experts said.
Since 2018, companies in the segment have attracted about $447 million in venture capital. Of them, $174 million is for the period from January to September 2024. This year, sidechain projects raised $105 million, rolaps — $63 million.
Biggest L2 Venture Capital Deals in Bitcoin. Source: Galaxy Digital.
Galaxy Digital experts noted that in the second quarter of 2024, second-level decisions on bitcoin received 44% of all venture investments in the L2 segment, which is 159% more than in the same period of 2023.
The authors attribute this dynamic to the fact that many traditional ventures did not interact with the Bitcoin ecosystem until 2024. The emergence of Ordinals and BRC-20 in 2023 gave them new investment opportunities.
Chronology of the launch of projects in the segment of L2-solutions on Bitcoin. Source: Galaxy Digital.
Against the background of a surge in investment activity in 2024, Galaxy Digital researchers recorded a sevenfold increase in the number of projects in the niche. But, in their opinion, in six years there will be three to five big players on the market instead of the current 75.
A particularly important factor for the long-term adoption of L2 projects on Bitcoin will be the DeFi ecosystem:
“In order to take a slice of the wrapped BTC market, DeFi applications on L2 on top of Bitcoin will have to offer higher returns compared to their counterparts on Ethereum. L2 solutions are only likely to succeed if they can take share from DeFi applications that accept tokenized versions of BTC such as WBTC, tBTC and cbBTC.”
The researchers called Bitcoin’s L2 more decentralized compared to its counterparts in other ecosystems. They cited as an example the situation with WBTC, which faced delisting due to the transfer of the project’s bitcoin reserves to the partial control of Justin Sun’s company BitGlobal.
We will remind, in September, Vitalik Buterin shared his ideas about what scaling solutions should look like in 2025.
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