There’s a false narrative that has been doing the rounds for far too long. It’s time to dispel this misguided storyline. Many people within the cryptocurrency industry have mistakenly convinced themselves that Bitcoin’s reduced scalability and slow transaction speeds would be its undoing. If it couldn’t scale, they said, then a better and more efficient chain would take its place. No BTC killer has ever emerged.
Experts were wrong, because they saw Bitcoin’s scaling limitations as a hindrance, rather than part of its design. Now, they have to watch BTC flip silver, approach $2tn MCAP, and become the most significant piece of financial infrastructure since the internet. They saw only the caterpillar, while those with a wider lens saw the butterfly.
The Caterpillar Awakens, Only to Find He is Different
Last year we emerged from the crypto winter, though still stretching, yawning, and slowly coming to terms with the resurgence of the digital asset world. In 2024, however, things have really accelerated, from BTC ETFs and the rise of Layer-2s, to Crypto-AI, BTCFi, Runes, are more.
At the start of 2023, Bitcoin’s DeFi TVL was less than $100m, at the start of 2024 it was just over $300m, in April it hit $1bn, in October it hit $2.6bn, and then recently, in November 2024, it surpassed $4.3bn. The sky is the limit for BTCFi, and one can only expect that the emergence of exciting Dapps and attractive staking opportunities with lucrative yields will only bring more investment as BTC becomes a true DeFi powerhouse.
The Lightning Network was Bitcoin’s first L2 solution, offering two-way payment channels between participants, processing transactions off-chain, and recording final results on the main chain. It proved to be fast, cheap, and good, effectively achieving the Iron Triangle that eludes most operations. In 2024, Babylon and exSat arrived on the scene to further extend Bitcoin’s capabilities by introducing smart contracts, cross-chain interoperability, native asset issuance, and, excitingly, decentralized exchanges (DEXs). The three L2s have all combined to compound the Bitcoin network effect, attracting developers and investors, while transforming Bitcoin from “digital gold”, or a simple store of value, into critical financial infrastructure.
These changes have not been missed by retail and institutional investors alike, as BTC ETFs total over $100bn in value and $BTC approaches $100k. Now, BlackRock, Fidelity, and many of the world’s biggest asset managers have changed their tune, and are now big fans of Bitcoin.
Bitcoin vs Ethereum: Same Fighters, New Arena
Both Bitcoin and Ethereum have undergone serious changes in the last 18 months, with both unlocking the rejuvenating potential of Layer-2 development. While Ethereum has also undergone major upgrades, like Dencun and the Merge, Bitcoin’s foundational code remains unchanged, with its permanence being its superpower.
$BTC $