Bitcoin NFTs, layer-2 and restaking hype ‘completely gone’

6 days ago

A Bitcoin layer-2 enforcement explained however Bitcoin narratives that were “overhyped” person present wholly vanished portion the ecosystem develops.

In a Cointelegraph interview, Bitlayer co-founder Charlie Hu laid retired 3 Bitcoin narratives that helium believed were overhyped. This included narratives that surrounded Ordinals, layer-2s and re-staking.

According to Hu, 1 of the overhyped narratives successful Bitcoin was non-fungible tokens (NFTs). The enforcement told Cointelegraph that portion inscriptions whitethorn person gone “to the moon,” Hu said the epoch is “completely gone.”

CryptoSlam information shows that successful the archetypal 4th of 2024, Bitcoin NFTs had a measurement of $1.4 billion. In 2025 Q1, the measurement is lone astatine $280 million, showing an 80% drop. The enforcement believes that the 1,000x days of Bitcoin NFTs whitethorn beryllium implicit and that radical can’t expect akin “crazy” terms performances anymore.

Are Bitcoin layer-2s moving retired of steam?

Apart from Bitcoin NFTs, Hu told Cointelegraph that the hype astir Bitcoin layer-2 and Bitcoin re-staking has besides declined among task capitalists.

Hu told Cointelegraph that astatine slightest 80 layer-2 networks aimed to get funded astatine the opening of 2024 erstwhile the layer-2 communicative was strong. The enforcement said galore projects pitched their ideas to investors, the media and antithetic communities. Hu said that portion determination was immoderate hype, this was “definitely over.”

Many different crypto executives and entrepreneurs resonate with Hu’s constituent of presumption astir the dying hype astir layer-2 ecosystems. On Feb. 20, Stacks co-founder Muneeb Ali said the “honeymoon phase” for Bitcoin layer-2s is over. The enforcement said that astir projects volition cease to exist arsenic their archetypal excitement fades.

Meanwhile, Hu besides told Cointelegraph that a 3rd “overhyped” communicative was Bitcoin re-staking. Hu told Cointelegraph that astatine the moment, determination are lone 2 to 3 projects inactive surviving aft the highest of the narrative’s hype signifier successful 2024.

While immoderate hyped narratives started to fade, Hu believes determination are galore things to look guardant to successful the increasing Bitcoin ecosystem. The enforcement said that portion layer-2s are a large narrative, they spot it much arsenic an motor that powers Bitcoin’s decentralized concern (DeFi) ecosystem, which could let holders to research output opportunities. Hu told Cointelegraph:

“Bitcoin layer-2s are providing architecture arsenic a programmable, trust-minimized benignant of infrastructure that could supply output for the Bitcoin whale holders oregon institutions. That’s a precise important narrative. I deliberation we’ll grow much and much with the usage cases with adoption.”

Bitcoin DeFi is yet to instrumentality off

Meanwhile, Dominik Harz, the co-founder of hybrid layer-2 Build connected Bitcoin (BOB), told Cointelegraph that Bitcoin layer-2s should beryllium seen arsenic a semipermanent play.

“Looking astatine Bitcoin Layer-2s done a short-term lens misses the point. Hype cycles travel and go, but lasting developments successful crypto, similar Bitcoin itself, are inherently semipermanent plays,” Harz said.

The enforcement besides believes that Bitcoin DeFi has not yet reached its afloat potential. “Bitcoin DeFi hasn’t adjacent truly taken disconnected yet. We’re precise early. Only 0.3% of Bitcoin’s marketplace headdress is progressive successful DeFi close present compared to 30% for Ethereum,” Harz told Cointelegraph.

Harz pointed retired this was a 100x discrepancy, saying it would alteration rapidly arsenic Bitcoin DeFi explodes. The enforcement besides said layer-2s are indispensable technological advancements for Bitcoin DeFi to deed the market.

Max Sanchez, the main exertion serviceman of layer-2 protocol Hemi Labs, besides believes that Bitcoin layer-2s are not losing steam.

The enforcement told Cointelegraph that the abstraction is entering a maturation signifier wherever fundamentals matter. Sanchez said that galore aboriginal projects successful the Bitcoin layer-2 abstraction brought exertion from Ethereum without adapting it to Bitcoin's unsocial architecture “in a mode that genuinely extends Bitcoin.”

Sanchez, who works connected a hybrid task connecting to Ethereum, besides said that gathering a layer-2 successful conscionable 1 silo and forgoing interoperability with Ethereum-based protocols is simply a “false notion.”