Strategic blockchain investments by HTX Ventures: A mid-year analysis

HTX Ventures’ 2024 Half-Year Investment Report reveals targeted investments in BTCFi, multichain infrastructure and user experience, which aim to unlock Bitcoin’s potential in DeFi and enhance blockchain interoperability.

HTX Ventures has released its 2024 Half-Year Investment Report, outlining its strategic investments and focus areas for the first half of the year. As a significant player in the blockchain venture capital (VC) sector, HTX Ventures targeted six key areas and invested in 23 projects to drive innovation and address the core challenges of Web3, as shown in the Figure below.

BTCFi: Expanding Bitcoin’s role in DeFi

One of the core areas of focus for HTX Ventures is Bitcoin decentralized finance, or BTCFi. Although Bitcoin remains a secure and widely recognized network, its use in DeFi has been limited due to its lack of smart contract capabilities. As of mid-2024, the total value locked (TVL) in BTCFi is approximately $1.2 billion, representing only 0.09% of Bitcoin’s market capitalization. 

In comparison, Ethereum’s TVL-to-market cap ratio is around 14%, indicating significant room for growth within the Bitcoin ecosystem. Even a modest increase to a 1% ratio could lead to a tenfold growth in BTCFi, potentially unlocking billions of dollars in value.

HTX Ventures has invested in projects like Babylon and BounceBit to unlock this potential. Babylon lets Bitcoin (BTC) be used as a staking asset for proof-of-stake blockchains. BounceBit — a centralized platform for restaking — provides foundational infrastructure for various decentralized finance (DeFi) products, and it aims to help expand Bitcoin’s utility beyond its role as a store of value.

Multichain infrastructure: Enhancing blockchain connectivity

HTX Ventures also places a strong emphasis on developing multichain infrastructure. The current blockchain landscape is fragmented, with many layer-1 and layer-2 networks operating independently, leading to inefficiencies. To address these challenges, HTX Ventures invested in projects such as Monad and Avail.

Monad is a layer-1 blockchain that improves the performance and scalability of the Ethereum Virtual Machine via parallelization. Avail builds a unification layer to solve the issue of rollup fragmentation at scale and provide a cost-effective and secure solution to improve cross-chain interoperability. These investments are geared toward building the infrastructure needed for a more interconnected and efficient blockchain ecosystem.

User experience: A crucial factor for Web3 adoption

Advanced blockchain solutions must be accessible and user-friendly to achieve widespread acceptance. This understanding has led HTX Ventures to invest in projects like Tomo, a Web3 social application that enhances user interactions. Tomo transforms users’ online presence into a universal social wallet and embeds financial incentives into social interactions.