In all likelihood, the move by the Sei Foundation – the organization behind layer1 blockchain Sei – to buy bankrupt genetic data company 23andMe is a long-shot at best, and potentially just a publicity stunt. But, it remains an incredibly exciting idea that has got a lot of people thinking.

Were such a deal to go through, we would see a Web3 company rescue a Web2 company, which would have enormous ramifications in and of itself. Web2 tech giants are already being challenged in the area of AI by much smaller, nimble, and more flexible companies. However, the purchase of what was once one of Silicon Valley’s shiniest stars by a blockchain upstart would be a total paradigm shift.

Beyond that, a deal would be a win for public understanding for data security and privacy. While we have all been vaguely aware of how Meta, Google, Apple, etc., take and use our data, we have chosen to ignore that for the convenience it affords us.

Then there has perhaps never been such a case as 23andMe, which holds DNA and other data for 15 million people. It shows the public how vulnerable their most personal and intimate data is in the hands of centralized companies and organizations.

It’s one thing when Facebook and Instagram are tracking our shopping and consumer habits and making our sensitive messages and emails vulnerable to leaks. With 23andMe, we’re talking DNA data; the very fabric of our human bodies has just been green-flagged for sale to the highest bidder.

If Sei is not successful, which is most likely, this data can and may well be sold to health or life insurance companies. They may then be able to use this data to potentially exclude people from vital healthcare or insurance policies, thanks to the questionable way in which the U.S. healthcare system is run and its discrimination policies enforced.

Perhaps, finally, this is a turning point at which the public may seriously come to understand the importance of owning their own data. Maybe more people will realize that to keep their data truly safe, they have full control of it themselves through the use of decentralized blockchain technology.

Of course, not every blockchain is created equal. However, Sei certainly claims to be highly secure, and projects like Arweave – which is a permanent storage chain built on a “pay one store forever” model – have applications that can allow you to upload and store your data privately, securely and permanently.

These are two among a growing list of options in our industry, but the point is this: there is simply no centralized solution beyond a piece of paper stored in a Swiss security deposit box with keys buried deep in the ground that can compare. And even then, someone can dig those keys up.

This is a watershed moment for people to understand the importance of data self-sovereignty. And it comes at a time when trust in centralized organizations, companies, and even governments is breaking down. As such, the 23andMe sale could mark a true turning point in history, and one that could reshape how Web3 is seen, understood and utilized.

Bitcoin (BTC) has always been the face of crypto, the first thing that comes to mind when you think of this market. But for years, its role has been largely static—held as a store of value, yet rarely used for anything else. Then BTCFi entered the scene: unlike traditional DeFi, which has been dominated by Ethereum (ETH) and other smart contract platforms, BTCFi is built around Bitcoin as the core asset.

In the last quarter of 2024, BTCFi’s total value saw a massive surge—from $800 million all the way to $6.5 billion. The momentum is impressive, to say the least. More institutional players are taking notice, and analysts predict that by 2030, roughly 2.3% of Bitcoin’s circulating supply (about $47 billion) could be actively used in decentralized finance. 

So clearly, BTCFi is not just a passing trend. But why is it gaining so much traction? Can it really be called the future of Bitcoin’s utility as a financial asset?

Let’s try to figure it out.

What is BTCFi, and why is it growing now?

BTCFi represents the intersection of Bitcoin and decentralized finance, with the first crypto playing the role of the core asset in this case. Typically, DeFi platforms have been built on blockchains like Ethereum, while Bitcoin holders had to wrap their BTC into ERC-20 tokens (like wBTC) to participate in this field.

This kind of tokenization started picking up the pace around 2020, allowing BTC holders to access DeFi services that are typically not available on the Bitcoin blockchain. These “wrapped” tokens are built in a way that makes them compatible with other blockchain networks. And so, they effectively extended Bitcoin’s functionality.

However, advancements in Bitcoin L2 solutions and LRTs, or layered rollup technologies, are now changing the rules. It is becoming unnecessary for Bitcoin to use “second class citizen” ERC-20 tokens anymore.

BTC LRTs, for example, operate on Ethereum and other chains as well, but use Bitcoin as the primary collateral in transactions. This means unlocking the use of Bitcoin as a yield-generating asset in other networks beyond its native chain.

The emerging Bitcoin L2s, meanwhile, are tackling this blockchain’s long-standing scalability issues, allowing for faster and more cost-efficient transactions. These innovations are going to fundamentally redefine Bitcoin, turning it from a passive store of value to an actively utilized financial asset.

Why is BTCFi the gateway for Bitcoin whales in 2025?

Large Bitcoin holders—miners, in particular—have often used CeFi loans backed by their BTCs to fund their operations since they didn’t want to outright sell those assets. This practice is still going on today, but BTCFi promises to make some changes. And that’s where everything will start from, really: by BTCFi enabling new opportunities for Bitcoin holders to put their assets to work.

Soon enough, Bitcoin whales will start looking at BTCFi as a powerful gateway that can be used to enter the DeFi space. And the way I see it, there are two key factors in 2025 that will influence that perception.

The first is the rise of Bitcoin ETFs. BTC ETFs currently account for almost 6% of all Bitcoin supply, having crossed $100 billion in holdings at the beginning of 2025. With them gaining mainstream traction, Bitcoin is increasingly perceived as the safest and most stable cryptocurrency asset.

This makes it a prime choice for DeFi, attracting large-scale holders who want to use their BTC without selling. Earlier in February this year, Goldman Sachs announced that it had invested $1.63 billion in Bitcoin ETFs. That’s easy proof right there.

The second major factor is the appearance of BTC L2 technologies, which we’ve already covered earlier. Until recently, the lack of scalability and transaction efficiency held Bitcoin back from DeFi adoption. Now, we are going to see a surge of L2 solutions that will enhance the network’s performance. And here’s the important part: they will do so while preserving Bitcoin’s core principles of decentralization and simplicity (and, hence, its robustness).

What DeFi platforms need to do for proper BTCFi integration

There are several challenges that will need to be overcome before BTCFi can achieve truly seamless integration. The biggest technical issue will be ensuring that Bitcoin-based L2 solutions become genuinely trustless. At the present time, they are not quite there, often relying on intermediaries and centralized elements, which goes against Bitcoin’s core philosophy.

The good news is that there’s a lot of R&D going on to make it happen. If successful, it could make the vast amounts of BTCs that are currently just lying there “collecting dust” be useful in DeFi.

Another big challenge is going to stem from people’s trust. Among Bitcoin holders, there are many who do not quite trust Ethereum and the existing Bitcoin tokenization methods. The key to winning them over will lie in creating robust and cost-effective solutions on the native Bitcoin network. Having a fully trustless and inexpensive execution layer on the BTC blockchain could really become the dealbreaker for these people.

The future of Bitcoin: More than just ‘digital gold’

For years, Bitcoin has been carrying the moniker of “digital gold”—a safe-haven asset meant for holding rather than using. These days, this is becoming increasingly untrue. As more institutional players enter the crypto space, the potential for BTCFi to become Bitcoin’s next-level evolution is very real.

The demand is on the rise, and the infrastructure is already being built. For Bitcoin whales looking to maximize their assets without selling, BTCFi could become the perfect answer.

Michael Egorov

Michael Egorov is a physicist, entrepreneur, and crypto maximalist who stood at the origins of DeFi creation. He is a founder of Curve Finance, a decentralized exchange designed for efficient and low-slippage trading of stablecoins. Since the inception of Curve Finance in 2020, Michael has developed all his solutions and products independently. His extensive scientific experience in physics, software engineering, and cryptography aids him in product creation. Today, Curve Finance is one of the top three DeFi exchanges regarding the total volume of funds locked in smart contracts.

Donald Trump’s upcoming “Liberation Day” tariff announcement is being framed by some experts as a reset of global trade and could have negative implications for crypto.

While much of the attention is focused on the political fallout and trade disruptions, the broader consequences for digital assets, and the global frameworks that support them, deserve a closer look.

Heidi Crebo-Rediker, senior fellow at the Council on Foreign Relations, recently described on Bloomberg TV U.S. President Donald Trump’s plans as a “tearing up” of existing free trade agreements with America’s closest allies. This includes the so-called “Dirty 15”, a group of major trading partners that together make up 80% of U.S. trade.

Trump’s proposed system, built on unilateral tariffs and non-tariff barriers, represents a complete shift away from the cooperative global order that has defined the last several decades of international trade.

Why does this matter for crypto?

Crypto is inherently cross-border. Its infrastructure, users, capital flows, and regulatory frameworks depend on global alignment and relatively open markets. Any shift toward economic fragmentation risks disrupting that progress.

Crebo-Rediker notes that countries like Canada are already preparing to diversify away from the U.S., bracing for a reconfiguration of trade and investment relationships. In this new era, markets could become more closed, regulation more inconsistent, and capital controls more common.

She may agree (I don’t know), but these are all hostile conditions for crypto adoption. She also warns of a broader retreat from the multilateral frameworks that underpin both global finance and regulatory cooperation.

If America turns inward while allies look elsewhere, especially towards China, which is positioning itself as a defender of the global system – it could weaken the West’s influence over digital asset standards.

Crypto advocates have cheered Trump’s recent embrace of stablecoins and digital finance, but they should be cautious. A fragmented world, with each country pulling in a different direction on trade and tech, is not a world where crypto can thrive.

Forget about Michael Saylor’s vision of Bitcoin surpassing a $200 trillion market cap and we can only hope it can hold on to a $1 trillion valuation.

If global coordination erodes, so too might the prospects for crypto’s next wave of adoption. If so, it was a fun run. If not, I’ll be glad to admit being wrong.