Galaxy Digital’s research division estimates that approximately $47 billion in Bitcoin liquidity could be bridged into Bitcoin layer-2 (L2) networks by 2030.
In its latest report, Galaxy Research analyzed the growth of Bitcoin L2 ecosystems in 2024, noting a sevenfold increase in projects and approximately $447 million in venture capital investments to date.
Galaxy estimated about $47 billion in Bitcoin (BTC) liquidity may be bridged into Bitcoin L2 networks by 2030.
Crypto VCs see other investment narratives in Bitcoin
The researchers highlighted that venture funding in Bitcoin L2s has already reached $447 million, with 39% of all investments happening in the first three quarters of 2024.
Top Bitcoin L2 funding deals by type. Source: Galaxy Research
Galaxy data showed that Bitcoin L2s raised $174 million in funding between January and September 2024. $105 million went to sidechains, while $63 million went to rollups.
The researchers also pointed out that the second quarter of 2024 showed a significant shift, with Bitcoin L2s capturing 44% of all VC capital invested in layer-2s across the crypto industry. The second quarter also showcased a 159% increase in investments compared to the first quarter of 2024.
Galaxy explained that the increase in VC investments highlighted that traditional crypto VCs — not including Bitcoin-focused funds — had little exposure to the Bitcoin ecosystem before 2024.
Previously, many such firms had limited exposure to Bitcoin-focused projects, viewing it primarily as “digital gold.” However, the emergence of Bitcoin Ordinals and BRC-20 tokens in 2023 presented new investment opportunities.
Galaxy believes that crypto VCs will continue to deploy capital into Bitcoin L2s as the ecosystem matures.
Galaxy expects $47 billion in BTC to flow into Bitcoin L2s
As the Bitcoin L2 ecosystem develops, Galaxy estimates that about $47 billion in BTC may flow into the L2 ecosystem by 2030. The report noted that this will be due to holders looking for yield opportunities for their assets. Galaxy wrote:
“If BTC reaches $100k in 2030, the TAM [total addressable market] for Bitcoin L2s could then reach up to $47bn, assuming that 2.3% of total BTC supply is locked in Bitcoin L2s by 2030.”
While the ecosystem is rapidly expanding, Galaxy researchers predict that only a few players — between three and five — will dominate the market among the 75 builders currently involved in the space.
Magazine: Crypto has 4 years to grow so big ‘no one can shut it down’: Kain Warwick, Infinex
