Bitcoin layer-2 builders pitch BTCFi as the next institutional unlock

Panelists pointed to growing institutional demand for bitcoin-backed lending and yield strategies. “Bitcoin has grown into a macro financial asset that everyone wants to hold,” said Charles Chong of BlockSpaceForce. “The next unlock is to build a financial system around it.”

Still, institutions are cautious. “On the one hand, they can work with regulated counterparties and have legal recourse in a centralized manner,” Chong of BlockSpaceForce said. “Or they can deploy in BTCFi permissionless manner, but in that case, you are trusting the protocol governance and assuming smart contract risk. I think with this in mind, a lot of institutions are actually going to pick the former solution today, at its current point.”


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