The decentralized finance (DeFi) ecosystem of Bitcoin is attracting more attention from venture capital, indicating an increasing demand for Bitcoin as a yield-generating asset.
Bitcoin DeFi, or BTCFi, is a technological model aimed at introducing decentralized financial functionalities to the Bitcoin underlying layer.
According to a new report from Maestro, a Bitcoin DeFi infrastructure provider, the BTCFi ecosystem secured $175 million in venture capital across 32 rounds of financing in the first half of 2025, with capital increasingly flowing towards consumer applications and demand-driven products.
Capital is shifting towards 'availability and demand-driven products, while infrastructure investments are maturing,' the report adds, noting that 20 out of 32 transactions targeted DeFi, custody, or consumer applications.
More venture capital may bring increased utility and yield-generating capabilities to Bitcoin, thus driving investment demand for this world’s first cryptocurrency.
However, Maestro's data indicates that while financing reached $130 million in the first quarter, fundraising activity slowed in the second quarter, raising only $44 million across 12 transactions, a decrease of 66%.
DeFi and traditional finance are converging in the BTCFi ecosystem.
BTCFi and Bitcoin-denominated capital markets could become a convergence point for traditional finance (TradFi) and DeFi. Maestro co-founder and CEO Malvin Bertin stated, 'For the first time since 2009, the fundamental components of on-chain financial applications are in place on Bitcoin, covering exchanges, lending, and stablecoins.'
'Bitcoin is evolving from a static reserve asset into a dynamic, productive financial network.'
Other industry observers have also noted the accelerated growth of the relationship between DeFi and TradFi. Nelli Zaltsman, Head of Blockchain Payment Innovations at JPMorgan's Kinexys, stated that improvements in infrastructure and increasingly close collaboration between the two will eliminate the boundaries between them faster than many expect.
Since the Bitcoin halving in 2024, interest in building DeFi capabilities based on the Bitcoin network has been growing, with this event introducing the Runes protocol, becoming the first interchangeable token standard on the Bitcoin blockchain.
