Bitcoin NFTs, layer-2, and restaking hype have completely disappeared

An executive from a Bitcoin layer-2 project explained how Bitcoin narratives that were once “overhyped” have now faded as the ecosystem continues to evolve.

During an interview with Cointelegraph, Bitlayer co-founder Charlie Hu identified three Bitcoin narratives that he believed were overemphasized, including Ordinals, layer-2s, and re-staking.

Hu highlighted non-fungible tokens (NFTs) as one of the overhyped narratives in Bitcoin, stating that while they may have seen a surge in popularity, that era has now passed.

According to CryptoSlam data, the volume of Bitcoin NFTs dropped significantly from $1.4 billion in the first quarter of 2024 to $280 million in 2025 Q1, indicating an 80% decrease. The executive suggested that the days of explosive growth in Bitcoin NFTs may be behind us.

Are Bitcoin layer-2s losing momentum?

Aside from Bitcoin NFTs, Hu also mentioned that the hype surrounding Bitcoin layer-2 and re-staking has dwindled among venture capitalists.

Hu explained that at least 80 layer-2 networks sought funding at the beginning of 2024 during the peak of the layer-2 narrative, but he believes that the excitement has now faded.

Many industry insiders, including Stacks co-founder Muneeb Ali, share Hu’s sentiment regarding the diminishing hype around layer-2 ecosystems. Ali stated that the “honeymoon phase” for Bitcoin layer-2s is over and that many projects may not survive as initial excitement wanes.

Furthermore, Hu mentioned that only a few projects focused on Bitcoin re-staking are still operational after the peak of the hype in 2024.

While some previously hyped narratives are waning, Hu remains optimistic about the future of the Bitcoin ecosystem, particularly with the potential for layer-2s to power decentralized finance (DeFi) opportunities for holders.

Bitcoin DeFi poised for growth

Dominik Harz, co-founder of hybrid layer-2 project Build on Bitcoin (BOB), believes that Bitcoin layer-2s should be viewed as a long-term investment.

Harz emphasized that lasting developments in crypto, such as Bitcoin itself, require a long-term perspective, as hype cycles come and go.

He also noted that Bitcoin DeFi has yet to reach its full potential, with only a fraction of Bitcoin’s market cap currently active in DeFi compared to Ethereum. Harz sees layer-2s as critical for the growth of Bitcoin DeFi.

Max Sanchez, CTO of layer-2 protocol Hemi Labs, echoed the sentiment that Bitcoin layer-2s are not losing momentum and emphasized the importance of adapting technology to Bitcoin’s unique architecture.

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