Franklin Templeton Backs Bitcoin DeFi Growth, Points to ‘New Utility’ for Investors
Author: Omkar Godbole | Edited by: Stephen Alpher Updated: May 2, 2025, 7:08 PM Published: May 2, 2025, 4:35 PM
The key takeaway from the Dubai Token2049 conference is that Bitcoin (BTC) is quickly moving beyond its traditional role as a store of value and becoming a potential DeFi asset to rival Ethereum and Solana.
Leading industry players like Franklin Templeton view this development as a positive, hoping it will increase Bitcoin’s utility without undermining its core appeal as a store of value, as pure believers and maximalists fear.
“I don’t think the focus on Bitcoin DeFi will weaken or complicate the core concept of Bitcoin,” said Kevin Farrelly, managing director of blockchain venture capital at Franklin Templeton and vice president of digital assets, during his keynote address at a Bitlayer side event this week. “Instead, it expands Bitcoin’s utility for a certain type of investor — those with the technical expertise to optimize for yield, security, or to meet their individual portfolio needs.”
“These users are not replacing the concept of ‘store of value’; they are complementing it,” Farrelly added. “This is not a dilution of the narrative, this is an evolution of the infrastructure.”
Franklin Templeton is an investor in Bitlayer, BitVM, which serves as Bitcoin’s computing layer while maintaining the security of the main network. It offers features like faster transaction processing, lower fees, and new capabilities like smart contracts or advanced DeFi integrations that Bitcoin’s base layer doesn’t support on its own.
Franklin Templeton’s Bitcoin ETF (EZBC) has seen net inflows of $260 million since its launch on January 11 last year. As of May 1, the fund held 5,213 BTC, representing more than $500 million in assets under management at a current Bitcoin price of just over $97,000.
Satoshi Nakamoto’s original idea for the Bitcoin blockchain was to create a decentralized financial system that promotes financial sovereignty and privacy by eliminating the need for intermediaries for transactions. However, more than a decade after its creation, the blockchain’s native cryptocurrency, Bitcoin, has quickly become known as digital gold—a reliable store of value—and the concept has made it a success.
Bitcoin’s market capitalization currently exceeds $1.9 trillion, accounting for nearly 60% of the digital asset’s total market value of $3.12 trillion, according to CoinDesk. It is the most liquid cryptocurrency, with daily trading volumes of several billion dollars worldwide, and several public companies have adopted it as a reserve asset.
Moreover, several regulated alternative investment vehicles have emerged in recent years.
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