The volatile world of DeFi is bringing new opportunities for long-term Bitcoin holders. According to a report from Binance, Bitcoin could become "more productive" if used in DeFi protocols, unlocking billions of USD in liquidity that is stuck in the wallets of HODLers. But is DeFi really safe for Bitcoin?


Is Bitcoin Being "Wasted" Because It Is Not Being Used?


According to a report from Binance released on Thursday, only 0.79% of the total Bitcoin is currently being used in DeFi. Meanwhile, the majority of BTC is held as a long-term reserve asset, especially after the #ETFbitcoin spot funds were approved in the U.S. last year.


Bitcoin was originally created as a global payment system, but today it is primarily viewed as "digital gold," helping investors protect their assets from inflation. This is why many people choose to HODL (hold long-term) instead of looking for ways to use BTC to generate profits.


Can DeFi Help Bitcoin Generate More Profits?


Binance believes that DeFi could make Bitcoin more efficient. Through decentralized financial applications, BTC could be used for collateral, interest-bearing loans, or participating in structured financial products instead of simply sitting idle in cold wallets.


Written report:



"The architecture of Bitcoin was not designed to support complex financial applications. But with the development of DeFi, BTC investors can now be more flexible in utilizing their assets."



Could Bitcoin Soon Participate More Deeply in DeFi?


One of the major barriers to #BitcoinDeFi is that DeFi protocols are largely built on Ethereum, the world's second-largest blockchain. Although there have been some solutions to bring Bitcoin into DeFi (such as Wrapped Bitcoin - WBTC), this is still not very common.


However, Binance notes that this could soon change, thanks to:



  • Layer-2 solutions for Bitcoin are developing, helping to reduce transaction fees and increase scalability.


  • The policy shift under the Trump administration, especially the SEC's repeal of SAB 121 regulations, has given Bitcoin more opportunities to access DeFi.



Similar to how gold and government bonds are used in traditional financial markets, Binance believes that Bitcoin will also become "more productive" as more protocols support it.


Risks of Bringing Bitcoin into DeFi


Although #defi offers significant potential for Bitcoin, it also carries considerable risks.



  • DeFi is an experimental field, with numerous hacks and scams causing billions of USD in losses for investors over the years.

  • Traditional Bitcoin holders often prioritize security, self-management of assets, and long-term value, rather than continuously putting BTC into financial protocols.



Binance's report highlights:



"BTCFi (Bitcoin DeFi) applications will need to align with the priorities of BTC users, which means focusing on security, self-custody, and preserving long-term value."



If Bitcoin DeFi protocols can ensure these factors, they could open up a completely new market for Bitcoin.


Conclusion: Is Bitcoin DeFi Really a Billion-Dollar Opportunity?


Bitcoin DeFi is still a nascent market, but if developed in the right direction, it could help unlock billions of USD in value that is "stuck" in BTC. With support from new technologies and more open policies from the government, DeFi could transform Bitcoin from a passive asset into a more flexible financial tool.


However, there are still many challenges regarding security, usability, and the trust of the BTC community. Do you think Bitcoin DeFi will succeed, or will it just be a difficult-to-implement idea?