Size of Opportunity

The liquid staking market for Bitcoin has significant potential, as demonstrated by comparisons with Ethereum's staking ecosystem.

Assuming a similar adoption rate to Ethereum's liquid staking tokens (LSTs), which currently represent about 4.2% of the total ETH supply, the potential market for Bitcoin liquid staking could reach approximately $50 billion in Total Value Locked (TVL).

This is based on Ethereum's current staking landscape, where about 32 million ETH are staked, representing 27.18% of the total ETH supply, with 5 million ETH engaged in restaking protocols. If Bitcoin were to achieve a similar 4.2% participation rate in liquid staking relative to its total supply, it would match the scale of the recently approved U.S. Bitcoin Spot ETFs.

This comparison suggests that the Bitcoin liquid staking market has the potential to become a major force in the cryptocurrency ecosystem, offering new opportunities for Bitcoin holders to participate in DeFi activities while maintaining exposure to BTC.

*The data used is from May 2024