How do you feel about the BTCFi narrative?

The narrative is a type of I'm looking forward to the subsequent rally and the reason is fairly simple.

Bitcoin is by far the most important crypto asset, but solely a tiny proportion of it's truly being used in DeFi. If native BTC can turn out to be usable for staking, lending, and collateral with out introducing unacceptable custody or bridge danger, the addressable market is gigantic.

But there's also a problem, and that's the truth that a variety of the early BTCFi progress was built around wrappers, bridges, and yield merchandise. That works till you start asking whether an establishment holding billions in BTC truly needs these further trust assumptions.

We've seen the sector grow shortly, however we've additionally seen TVL contract sharply when incentives disappear or danger becomes clearer. So I'm much less keen on headline TVL and more enthusiastic about whether BTCFi can develop sustainable credit score markets around BTC itself. If that occurs, I feel the narrative has legs, if not, it in all probability stays another cycle the place the thought was greater than the precise usage.

What do you assume will occur with this narrative sooner or later?