Bitcoin’s Growth Potential: Emulating Ethereum’s Success

The notion that Bitcoin (BTC) might adopt concepts from another blockchain may seem far-fetched. After all, Bitcoin paved the way, setting the precedent for other cryptocurrencies like Litecoin (LTC), Dogecoin (DOGE), Monero (XMR), and Ethereum (ETH) among others. The landscape has shifted significantly over the past 15 years. While Bitcoin has remained a dominant force, the broader industry has evolved beyond traditional “buy and hold” strategies that depend on new investors to generate profit. Nowadays, various innovative mechanisms exist for leveraging digital assets to earn returns, create revenue, and engage in recreational activities.

Although much of this innovation initially emerged from Ethereum and its expansive multi-token, multi-chain environment, the trend is now circling back towards Bitcoin. Bitcoin is now equipped with its own set of layer-2 solutions, native tokens, nonfungible tokens (NFTs), and decentralized finance (DeFi) protocols. These developments position Bitcoin to potentially see substantial growth in terms of active users, total value locked (TVL), and wallet activity.

Bitcoin is at a crossroads: Can it replicate the rapid growth that Ethereum experienced in 2017 and 2020, which was driven by the excitement around initial coin offerings and DeFi? By implementing strategies from Ethereum’s playbook, Bitcoin could realize exponential growth in the years to come—but this hinges on Bitcoin developers adopting some of Ethereum’s successful features.

One of Ethereum’s standout attributes is its interoperability. This blockchain’s success in supporting multiple tokens is partly due to universal standards. For instance, ERC-20 tokens are widely compatible and easily transferable between Ethereum Virtual Machine (EVM) chains. In contrast, Bitcoin deals with a variety of competing standards for tokens and inscriptions, which depends on each platform’s preference. Some platforms favor the BRC-20 standard, while others prefer Runes or even Cursed Inscriptions, leading to a fragmented ecosystem for Bitcoin.

Bitcoin’s layer-2 ecosystem is equally intricate, with many competing networks vying to be the optimal scaling solution. Among them, Stacks and the Lightning Network stand out, but there are numerous other contenders, including sidechains and various layer-2s that have only minimal connections to Bitcoin. This complexity can be bewildering. For Bitcoin to become a viable host for DeFi, NFTs, real-world assets (RWAs), and other on-chain applications, it must adopt universal standards that enable seamless value transfers between chains. This will require collaboration among Bitcoin developers to foster an interconnected ecosystem, ultimately fueling exponential growth across various metrics like daily active users and TVL.

Comparing Bitcoin’s current TVL with Ethereum’s offers insights into their respective ecosystems. TVL measures the value of assets held within a blockchain protocol for staking and DeFi purposes, despite its occasional inaccuracies due to potential “double counting.” Bitcoin’s TVL is currently around $1.15 billion, a figure that pales in comparison to Ethereum’s $65 billion, not to mention the additional billions on other EVM chains. Bitcoin’s TVL is comparable to where Ethereum stood four years ago, just before DeFi summer ignited a surge of economic activity, introducing concepts like yield farming and novel token models.

History tends to rhyme rather than repeat itself. In 2016, Ethereum was at the peak of its ICO craze, but by mid-2017, most new assets were launching on Ethereum. By 2020, the initial coin offering trend had subsided and Ethereum had evolved, giving rise to decentralized finance and becoming the preferred network for the burgeoning NFT market. Today, although Ethereum’s NFT sector has dwindled, Bitcoin’s Ordinals demonstrate that NFTs are merely evolving, not disappearing. Bitcoin Ordinals, like the popular NodeMonkes collection, are showing significant market activity, proving the enduring appeal of NFTs.

The rise of BRC-20 tokens is also attracting attention. These tokens are increasing network activity, mirroring Ethereum’s history. The daily transaction volume for BRC-20 tokens now resembles the patterns seen with ERC-20 tokens in 2018, suggesting a similar surge in transaction demand. The existence of 14,000 tokens built on Bitcoin technology enhances its perceived value, potentially outweighing the speculative component and increasing the wealth among BTC holders.

Current metrics suggest Bitcoin may be on the verge of a parabolic breakout. The market cap for BRC-20 tokens has surged to over $2 trillion, indicating spectacular growth. Inscriptions, the process by which unique assets like Ordinals are created on Bitcoin, have similarly seen meteoric growth. More than 66 million inscriptions have been recorded, with over 6.8 BTC spent in fees. This explosion in activity draws parallels with Ethereum’s 2017 multi-token boom, which saw ETH’s price soar thanks to burgeoning DeFi.

As Bitcoin’s DeFi landscape grows and BRC-20 tokens start to outpace competitors, increased demand for Bitcoin could lead to value growth. Although Bitcoin’s larger market cap and tighter regulations might temper the rate of this growth compared to Ethereum’s past surges, significant appreciation in value remains possible. By emulating Ethereum’s past innovations, Bitcoin developers could pave the way for a similarly prosperous future for Bitcoin.

is a guest columnist for and the CEO of the cryptocurrency exchange Bitget. She holds a bachelor’s degree from the National University of Singapore (NUS) and an MBA from the Massachusetts Institute of Technology (MIT). She has previously held executive positions at the Fortune 500 unicorn company Accumulus and venture-backed VR startups XRSPACE and ReigVR.