Pantera Capital, a prominent investment firm, has identified a substantial opportunity worth over $450 billion in integrating decentralized finance (DeFi) with the Bitcoin blockchain, potentially propelling Bitcoin-based decentralized applications (dApps) to the forefront of the cryptocurrency landscape.
In a recent communication via email newsletter, Pantera Capital underscored the immense potential for Bitcoin to amass $450 billion in liquidity through DeFi ventures, particularly if they mirror the market shares witnessed on the Ethereum blockchain presently.
Currently, Ethereum dominates the DeFi sector, hosting the lion’s share of activity, as noted by Pantera Capital. Historically, Ethereum-based dApps have represented varying proportions of Ethereum’s market capitalization, ranging from 8% to 50%, with the current figure hovering around 25%. Extrapolating these ratios to Bitcoin suggests a potential influx of around $225 billion in value to the network.
Furthermore, Pantera Capital predicts that the foremost decentralized application on the Bitcoin blockchain could eventually attain a valuation of $20 billion, firmly establishing itself among the top-ranking assets in the crypto ecosystem.
“This would position it squarely within the top 10 most valuable assets in the crypto sphere. Despite Bitcoin nearing the trillion-dollar mark once again, it still harbors an untapped opportunity worth half a trillion dollars,” asserted Pantera Capital.
In mid-January, Pantera Capital stressed the importance of selecting tokens backed by robust underlying protocols and demonstrated product-market fit, anticipating their outperformance in the upcoming market cycle.
While refraining from specifying particular tokens, the firm emphasized the paramount significance of token selection over the long term, indicating that outperformance would be contingent on a case-by-case basis rather than being dictated by specific sectors or transient speculative trends. Pantera Capital also anticipates continued growth of DeFi on the Bitcoin blockchain in the foreseeable future, with the total value locked on the platform potentially reaching 1-2% of Bitcoin’s market capitalization.
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