On July 15, 2021, Twitter and Square CEO Jack Dorsey dropped a bombshell that sent ripples through the cryptocurrency world. He announced that Square was creating a new business unit dedicated entirely to building decentralized financial services on Bitcoin. The timing was telling — the DeFi industry had swollen to a staggering $110 billion in total value locked, and almost none of it was running on the Bitcoin network.
By July 18, the crypto market was still digesting the implications. Bitcoin traded at $31,796 on CoinMarketCap, showing modest gains of 2.9% on the day according to Kraken’s market report, while Ethereum — the backbone of most DeFi protocols — hovered at $1,895.55. The contrast was stark: ETH-based DeFi was flourishing, and Bitcoin, the largest cryptocurrency by market cap at nearly $597 billion, was largely sitting on the DeFi sidelines.
TL;DR
- Jack Dorsey announced Square’s new Bitcoin-focused DeFi business unit on July 15, 2021
- The DeFi industry had approximately $110 billion in total value locked at the time
- Bitcoin traded at $31,796 while Ethereum sat at $1,895 on July 18
- Dorsey’s vision aimed to bring Bitcoin into the DeFi ecosystem dominated by Ethereum
- Total spot trading volume was $390 million on July 18, well below the 30-day average of $911 million
Dorsey’s Bitcoin-First Vision for DeFi
Dorsey’s announcement was characteristically direct. The new business unit, which would later be named TBD, was conceived as an open-source developer platform focused on Bitcoin. The core thesis was straightforward: Bitcoin deserved its own DeFi infrastructure rather than relying on wrapped tokens or bridge protocols to access Ethereum’s DeFi ecosystem.
The logic was hard to argue with. On July 18, Bitcoin’s market capitalization stood at roughly $596.5 billion — more than 2.5 times Ethereum’s $221 billion. Yet virtually all major DeFi protocols, from Uniswap to Aave to Compound, were built on Ethereum. Bitcoin holders who wanted to participate in DeFi had to wrap their BTC as WBTC or use bridging solutions, adding complexity and counterparty risk.
Key DeFi tokens reflected this Ethereum-centric reality in their July 18 trading. AAVE traded at $266.94 with a modest 2.3% gain, UNI sat at $16.90, and SUSHI showed strength at $7.80 with a 3.9% daily increase according to Kraken data. Even Synthetix’s SNX, which had been working on layer-2 scaling solutions, traded at $9.028, down 3.8% on the day.
The Grayscale GBTC Unlock Looms Over Markets
While Dorsey’s DeFi announcement captured headlines, another massive event was unfolding in the Bitcoin market. Grayscale’s Bitcoin Trust (GBTC) was undergoing what was then the largest unlock in its history — approximately 40,000 BTC becoming available to investors who had been locked in for six months.
The unlock had sparked fears of a potential selloff. However, prominent voices in the industry, including FTX CEO Sam Bankman-Fried, argued that the unlock would not significantly impact Bitcoin’s price. The reasoning was that many GBTC shareholders were long-term holders who were unlikely to dump their positions immediately.
Market data on July 18 appeared to support this view. Bitcoin was up 2.9% on the day at $32,267 on Kraken, with $117.3 million in trading volume. The broader market showed resilience, with Polkadot gaining 3.7% to $12.905 and Dogecoin rising 2.9% to $0.1879.
DeFi Tokens Show Mixed Signals
The DeFi sector itself was navigating choppy waters in mid-July 2021. After the explosive growth of 2020 and early 2021, many DeFi tokens had pulled back significantly from their highs. Total spot trading volume across all of Kraken’s markets was $390 million on July 18 — less than half the 30-day average of $911 million, suggesting reduced market participation.
Maker (MKR) showed a healthy 3.1% gain at $2,525.20, while Compound (COMP) slipped 1.3% to $383.75. The divergence among DeFi blue chips reflected an ecosystem in transition — protocols were grappling with regulatory uncertainty, security concerns, and the challenge of maintaining user growth after the initial DeFi summer boom.
Dorsey’s entry into the space promised to shake things up. If Square could build robust DeFi infrastructure natively on Bitcoin, it would open up the network’s massive liquidity and user base to decentralized lending, trading, and yield generation — activities that had been largely confined to Ethereum and its layer-2 solutions.
What TBD Means for Bitcoin’s Future
The TBD project represented more than just a corporate foray into crypto. Dorsey had been one of the most vocal proponents of Bitcoin among major tech CEOs, and his commitment to building open-source infrastructure rather than a closed product was notable. The project aimed to create tools that developers could use to build a Bitcoin-native financial system.
The timing was significant. The crypto market had experienced a sharp correction from its April 2021 highs, with Bitcoin down significantly from its all-time high near $64,000. The Grayscale unlock fears, China’s ongoing crackdown on Bitcoin mining, and broader macroeconomic uncertainty had all contributed to a risk-off environment.
Yet DeFi continued to grow. The $110 billion in total value locked represented a remarkable achievement for an industry that had barely existed two years earlier. If Dorsey could capture even a fraction of that value for Bitcoin, it could fundamentally change the competitive dynamics between the two largest cryptocurrencies.
Why This Matters
Dorsey’s Bitcoin DeFi announcement on July 15, 2021, was a watershed moment for the cryptocurrency industry. It signaled that one of Silicon Valley’s most prominent CEOs believed Bitcoin could be more than a store of value — it could be the foundation of an entire decentralized financial system. With Bitcoin commanding a $597 billion market cap and DeFi at $110 billion in TVL, the opportunity was enormous. The question wasn’t whether Bitcoin DeFi would happen, but how quickly developers could build the infrastructure to make it a reality. The events of mid-July 2021 — from the GBTC unlock to Dorsey’s announcement — marked a pivotal week in Bitcoin’s evolution from digital gold to a platform for financial innovation.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making investment decisions.
tbd ended up being basically nothing lol. jack talked a big game about BTC DeFi but where are the actual products? years later and ETH still runs DeFi
The $596B market cap argument for BTC DeFi made sense on paper. Problem is Bitcoin script is deliberately limited. You need sidechains or wrapped tokens either way.
spot volume at $390M vs $911M average tells you everything. nobody was actually trading during this period, just headline reactions
^ the low volume is actually bullish long term. accumulation phase, not distribution