BTCFi emerges amidst an overwhelmingly optimistic market sentiment towards cryptocurrencies, notably Bitcoin. The leading cryptocurrency is anticipated to undergo its quadrennial halving event in April 2024.
Bifrost, a web3 derivatives protocol, has introduced its proprietary staking service tailored for Bitcoin holders. Native staking for Bitcoin has long been more of a concept than a reality. The inception of this service traces back to the now-defunct Celsius Network, primarily a centralized entity. However, in a recent Medium blog post, Bifrost has unveiled its ambition to revolutionize the landscape by offering decentralized Bitcoin staking through a new service dubbed BTCFi.
The objective is to enable Bitcoin holders to generate passive income with reduced risk within a user-friendly platform. BTCFi also operates on a self-custodial model, ensuring users retain complete control over their Bitcoin assets throughout the staking process.
Bifrost highlighted some of the unique features of BTCFi, emphasizing its native Bitcoin usability. This functionality allows users to lock up real Bitcoin assets and earn passive income through a transparent and equitable reward system.
Additionally, BTCFi offers cross-chain interoperability, enabling holders to transfer BTC-backed liquidity to and from other blockchain networks. Bifrost believes this will establish a ‘positive flywheel system,’ expanding the utility of the proof-of-work (PoW) native crypto asset. The underlying asset for BTCFi is BtcUSD, an over-collateralized stablecoin backed by Bitcoin.
Over-collateralization minimizes the risk of default and ensures the stablecoin maintains its peg, as users pledge a substantial portion of their digital assets as collateral to access platform funds. Leveraging Bitcoin’s intrinsic qualities as a store of value and safe haven, BtcUSD is designed to mitigate significant price fluctuations.
The 2024 Bull Run Could Be Triggered by Bitcoin’s Halving Event.
BTCFi arrives amidst a backdrop of overwhelmingly positive market sentiment towards cryptocurrencies, especially Bitcoin. The leading cryptocurrency is poised to undergo its quadrennial halving event in April 2024.
A Bitcoin halving event entails the reduction of the block reward granted to network miners. Presently, miners receive 6.25 BTC for each validated transaction they process and add to the blockchain.
Following the Bitcoin halving event, this block reward will diminish to 3.125 BTC per successfully mined block. With a tighter supply, Bitcoin’s demand is anticipated to surge exponentially, potentially driving a significant price increase.
Coinbase, in its weekly report, sheds light on the potential trajectory for Bitcoin and the broader crypto market, stating that the technical obstacles that previously impeded their growth are now diminished.
As per the authors of the report, David Duong and David Han, the technical factors exerting pressure on Bitcoin, as well as other crypto assets, are starting to diminish.
