Originally published on: November 21, 2024
Galaxy Digital’s groundbreaking research suggests that a staggering $47 billion worth of Bitcoin liquidity could be channeled into Bitcoin layer-2 (L2) networks by the year 2030.
In their recent analysis, Galaxy Research delved into the explosive growth of Bitcoin L2 ecosystems by 2024. The findings revealed a remarkable sevenfold surge in projects and an impressive $447 million in venture capital investments up to date.
The research experts projected that a massive $47 billion in Bitcoin liquidity is poised to flow into Bitcoin L2 networks by the end of the next decade.
Diving deeper into the statistics, Galaxy disclosed that venture funding injections into Bitcoin L2s have already hit the $447 million mark, with a whopping 39% of all investments occurring in the initial three quarters of 2024.
According to Galaxy’s data, Bitcoin L2s amassed a staggering $174 million in funding during the period between January and September 2024, with 105 million being allocated to sidechains and 63 million to rollups.
Moving forward, Galaxy highlighted a pivotal shift witnessed in the second quarter of 2024, where Bitcoin L2s seized 44% of all VC capital directed towards layer-2s within the crypto sphere. This period also saw a notable 159% surge in investments compared to Q1 of 2024.
Galaxy’s experts explained that the rise in VC investments signified the growing interest of traditional crypto VCs − excluding Bitcoin-centric funds − in the Bitcoin ecosystem starting from 2024. It marked a pronounced departure from their prior hesitance, perceiving Bitcoin mainly as “digital gold.” The introduction of Bitcoin Ordinals and BRC-20 tokens in 2023 opened up fresh avenues for investment, propelling the sector forward.
Anticipating the future trajectory, Galaxy envisions continued capital deployment into Bitcoin L2s by crypto VCs as the ecosystem matures further.
As the Bitcoin L2 landscape evolves rapidly, Galaxy forecasts that a whopping $47 billion could potentially flow into the L2 ecosystem by 2030. This colossal inflow is foreseen as a direct result of asset holders seeking lucrative yield opportunities for their holdings.
While the sector expands exponentially, Galaxy’s researchers predict that only a select few players − estimated between three to five entities − will emerge as dominant forces in a market currently bustling with 75 active builders.
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