TL;DR
- An estimated $47 billion in BTC could flow into Bitcoin L2s networks by 2030.
- Between January and September 2024, $447 million was invested in Bitcoin L2s.
- Few players are expected to dominate the Bitcoin second layer network ecosystem in the coming years.
According to data from Galaxy Research, the adoption of Bitcoin‘s second layer (L2) networks could see significant growth in the coming years, with a projection of $47 billion in BTC flowing into these systems by 2030.
The report highlights that the capital invested in these projects has shown an upward trend, with a figure of $447 million invested between 2023 and 2024.
This figure represents a growing interest in L2 solutions for Bitcoin, a network known for its limited scalability capabilities.
Galaxy Digital’s research underscores that as more users look for ways to streamline their Bitcoin transactions, second-layer solutions will be key to the network’s evolution.
One of the reasons driving this growth is the increase in investment in sidechains and rollups, two types of solutions that seek to improve transaction efficiency without compromising the security of the main Bitcoin blockchain.
During the first three quarters of 2024, $174 million was invested in L2s, with a split of $105 million for sidechains and $63 million for rollups.
Galaxy Digital notes that this surge in investment is not only coming from traditional venture capital funds, but also from new players interested in Bitcoin’s potential beyond its role as “digital gold.”
Galaxy‘s report, based on data obtained from leading industry investments, reflects a major shift in perception around Bitcoin, especially with the emergence of technologies such as Ordinals and BRC-20 tokens in 2023.
As the market matures, the Bitcoin L2 ecosystem is expected to continue to expand.
In this sense, Galaxy Digital estimates that BTC liquidity on these networks could exceed $47 billion by 2030.
This is because BTC holders, looking for new ways to generate yield from their assets, will start using these L2 platforms to maximize their returns.
If the price of Bitcoin reaches $100,000 in 2030, the total amount of BTC that could be locked in L2 networks would be approximately 2.3% of the total BTC supply, which would be an indicator of growing interest and market maturity.
Dominance and consolidation projections in the Bitcoin L2s market
Although the outlook is promising, the Bitcoin L2s market is expected to consolidate around a few key players.
Of the 75 projects currently in development, Galaxy Digital estimates that three to five players will dominate the industry.
This consolidation phenomenon is common in new technological ecosystems, where a limited number of platforms end up gaining the majority of the market.
Investors are closely watching how these projects develop, especially as venture capital funds, previously more reluctant to invest in Bitcoin, are now becoming more involved in this segment.
This shift in focus toward L2 networks reflects a broader vision for the future of Bitcoin, one that transcends its use as a simple store of value.
As second layer technology continues to be refined, investment opportunities in these systems are multiplying.
The increased adoption of L2 solutions is expected to provide new performance opportunities for Bitcoin users, while also solving some of the historical scalability challenges the original blockchain has faced.
The future of Bitcoin L2 is marked by a combination of innovation and optimization.
The expansion of the L2 ecosystem and capital investment are just the beginning of what could be a revolution in the way we interact with the Bitcoin network, transforming it into a much more efficient and accessible system for a wider range of users.