Bitcoin Surges Past $100K, But DeFi Faces Challenges: Finance Redefined

The cryptocurrency market had an exciting week, with significant movements across the board. As the overall Crypto Market cap pushed past $3.27 trillion, many investors saw their portfolios grow. However, beneath the surface of this bullish trend, the decentralized finance (DeFi) sector presented a more complex picture, experiencing headwinds despite some positive developments. Let’s dive into the details of this contrasting week in crypto.

Bitcoin Price Reaches New Heights

This past week, the Bitcoin price made headlines by reclaiming the $100,000 mark and surging to a high of $103,600 on May 8th. This achievement marked the third time Bitcoin has traded above six figures, following previous instances in December 2024 and January 2025. The renewed strength saw Bitcoin’s market dominance climb above 60%, indicating strong sentiment for the leading cryptocurrency.

Several factors likely contributed to this upward movement:

• Increased market confidence following previous price milestones.
• Potential positive impact from macroeconomic news, such as the US President announcing a potential trade deal with the UK that could remove tariffs.
• General bullish momentum across the broader crypto space.

Beyond Bitcoin: Ether and the Wider Crypto Market

While Bitcoin led the charge, other major cryptocurrencies also performed well. Ethereum (ETH) saw a substantial jump of 26% after the implementation of the Pectra upgrade. This upgrade brought improvements to the Ethereum ecosystem, boosting confidence and driving Ether’s price from around $1,800 to over $2,300 within days.

The overall Crypto Market capitalization saw an 8.6% increase week-over-week, reflecting a widespread positive trend. While Bitcoin and Ether were major contributors, many altcoins also posted gains, contributing to the market’s expansion beyond $3.27 trillion.

What’s Happening in DeFi? A Mixed Bag

The picture in the DeFi sector was less uniformly positive compared to the overall market surge. Data shows a notable decline in Total Value Locked (TVL) across various DeFi platforms.

For instance, Rootstock, a platform for Bitcoin DeFi, experienced a decline in TVL during Q1 2025:

• Bitcoin-denominated TVL dropped by 7.2%.
• Dollar-denominated TVL fell by over 20%.

This trend mirrored a broader decline in Ethereum-based DeFi TVL, which saw a 27% decrease in the same period. The reasons for this TVL decline are complex and could include factors like shifting investor focus, changes in yield opportunities, or broader market corrections within specific DeFi protocols.

However, it wasn’t all negative for Bitcoin DeFi. Messari’s report on Rootstock highlighted a significant surge in merged mining participation, reaching an all-time high of 81% in Q1 2025. This increase, driven by the onboarding of major mining pools, boosted Rootstock’s hash power significantly. This demonstrates that while capital might be flowing out of some DeFi protocols (affecting TVL), the underlying infrastructure and participation from miners can still see growth.

Navigating Crypto Security Concerns

Despite the positive market momentum, the issue of Crypto Security remains critical. April saw a sharp increase in losses due to hacks, with nearly $360 million stolen across 18 incidents. This represented a dramatic rise compared to March.

A significant portion of the losses stemmed from a large unauthorized Bitcoin transfer amounting to $330 million, reportedly the result of a social engineering attack targeting an individual.

Experts in the field, like Hacken CEO Dyma Budorin, emphasize that the industry needs to move beyond basic security measures. Relying solely on penetration tests or bug bounties is insufficient. A more comprehensive approach is required to protect assets against increasingly sophisticated threats.

The Rise of AI DApps: A New Challenger?

While gaming and DeFi have historically dominated the decentralized application (DApp) landscape, artificial intelligence (AI) is quickly gaining ground. According to DappRadar data for April:

• Gaming and DeFi maintained a combined 21% DApp dominance.
• AI DApps climbed to 16% dominance, up from 11% in February.

This growth suggests increasing user interest and development in AI-powered decentralized applications. Analysts predict that if this trend continues, AI DApps could soon challenge the established dominance of gaming and DeFi, potentially ushering in a new phase for the DApp ecosystem.

Leveraging Bitcoin: The Growth of Bitcoin-Backed Loans

As the Bitcoin price matures and institutional adoption grows, investors are becoming more comfortable using their BTC holdings in new ways. One notable trend is the increasing interest in Bitcoin-backed loans.

Xapo Bank CEO Seamus Rocca points out that investor sentiment has shifted towards a longer-term view of Bitcoin. This confidence, bolstered by institutional involvement and Bitcoin’s price stability above previous liquidation levels, makes borrowing against BTC a more appealing option.

Bitcoin-backed loans allow holders to access liquidity for expenses without selling their assets. Instead of liquidating BTC during price increases, investors can borrow against it, pay interest, and maintain their exposure to potential future gains. This strategy provides flexibility for Bitcoin holders facing unexpected financial needs.

Market Summary

This week in crypto highlighted the dynamic nature of the market. The overall Crypto Market saw significant growth, propelled by a strong Bitcoin price surge past $100K and a notable rise in Ether following its upgrade. However, the DeFi sector presented a more nuanced picture, with TVL declining despite growth in specific areas like Bitcoin DeFi merged mining. Meanwhile, the persistent challenge of Crypto Security was underscored by substantial losses from hacks, emphasizing the need for robust protection measures. Looking ahead, the increasing prominence of AI DApps suggests potential shifts in the decentralized application landscape, while the growing adoption of Bitcoin-backed loans indicates evolving strategies for leveraging digital assets.