How do you feel about the BTCFi narrative?

The narrative is a type of I'm waiting for the subsequent rally and the reason is fairly simple.

Bitcoin is by far the most important crypto asset, yet only a tiny proportion of it is 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 an issue, and that's the fact that lots of the early BTCFi progress was constructed around wrappers, bridges, and yield merchandise. That works until you start asking whether an institution holding billions in BTC truly needs these further trust assumptions.

We've seen the sector grow shortly, however we've also seen TVL contract sharply when incentives disappear or danger becomes clearer. So I'm less interested by headline TVL and extra taken with whether or not 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 actual usage.

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