Bitcoin Layer-2s Poised for Explosive Growth: $47 Billion in Liquidity by 2030
Galaxy Research has revealed that $174 million was invested in Bitcoin layer-2 (L2) networks between January and September 2024. In a bold projection, the research division of Galaxy Digital estimates that by 2030, approximately $47 billion in Bitcoin liquidity could flow into L2 ecosystems.
Explosive Growth in Bitcoin L2 Ecosystems
The latest report from Galaxy Research highlights significant growth in the Bitcoin L2 ecosystem throughout 2024. The report notes a sevenfold increase in active projects and a total of $447 million in venture capital investments in Bitcoin L2s to date.
Bitcoin L2 networks attracted $174 million in funding in the first three quarters of 2024 alone. Of this, $105 million was directed toward sidechains, while $63 million was allocated to rollups.
The second quarter of 2024 marked a pivotal moment, with Bitcoin L2s accounting for 44% of all VC investments in layer-2s across the crypto industry. This quarter also saw a 159% surge in investments compared to the first quarter, signaling a growing appetite among investors.
Crypto VCs Pivot Toward Bitcoin Ecosystems
Historically, Bitcoin-focused investments have been limited, with traditional crypto VCs viewing Bitcoin primarily as “digital gold.” However, the emergence of Bitcoin Ordinals and BRC-20 tokens in 2023 reshaped the narrative, offering new avenues for innovation and investment.
The Galaxy report notes that 39% of Bitcoin L2 venture capital investments in 2024 occurred during the first three quarters of the year. This increase underscores the shift in investor sentiment as traditional crypto VCs began exploring the untapped potential of Bitcoin ecosystems.
As the Bitcoin L2 ecosystem matures, Galaxy predicts sustained VC interest, particularly from firms seeking exposure to this evolving market.
Bitcoin L2 Liquidity Projections
Looking ahead, Galaxy Research estimates that by 2030, approximately $47 billion in Bitcoin liquidity will be bridged into L2 networks. This projection assumes that BTC reaches $100,000 in 2030 and that 2.3% of total Bitcoin supply will be locked into L2 solutions, driven by holders seeking yield-generating opportunities.
“If BTC reaches $100k in 2030, the TAM [total addressable market] for Bitcoin L2s could then reach up to $47bn,” Galaxy researchers stated, emphasizing the potential scale of the ecosystem.
Market Consolidation Expected
While the Bitcoin L2 ecosystem is expanding rapidly with 75 active builders, Galaxy predicts that only a few major players — between three and five — will dominate the market by 2030. This anticipated consolidation will likely favor solutions that offer the most robust infrastructure and user-friendly experiences.
Key Takeaways
- $447 million has been invested in Bitcoin L2s to date, with $174 million raised in the first three quarters of 2024.
- Second-quarter 2024 investments surged by 159%, highlighting growing VC interest.
- Galaxy forecasts $47 billion in Bitcoin liquidity bridged to L2s by 2030, assuming a $100k Bitcoin price.
- The ecosystem’s growth is expected to consolidate around three to five dominant players.
With the ongoing evolution of Bitcoin L2s, venture capital activity is set to play a pivotal role in shaping the future of this transformative ecosystem. As new narratives and opportunities emerge, Bitcoin’s utility as more than just “digital gold” continues to unfold.
