Fireblocks, a leading institutional crypto infrastructure provider, has announced the integration of the Stacks blockchain, a Layer-2 network for Bitcoin, to offer its clients direct access to Bitcoin-based decentralized finance (DeFi) applications. The integration, set to go live in early 2026 (Q1), will allow Fireblocks' more than 2,400 institutional clients to custody Stacks (STX) tokens, mint and bridge sBTC, and interact with Bitcoin-native lending, swapping, and yield-bearing protocols directly from the Fireblocks platform.
A key technical breakthrough of this integration is its circumvention of Bitcoin's 10-minute average block time. By leveraging the Stacks blockchain, which has an average block time of about 29 seconds (5 seconds according to one source), transactions can be processed much faster while still settling to the Bitcoin ledger for finality. A Stacks spokesperson stated this resolves "one of the most common objections for financial institutions" considering BTC-based DeFi.
The move signals strong institutional interest in Bitcoin DeFi despite a broader market downturn that has seen Bitcoin's price fall roughly 40% from its October 2025 all-time high above $125,000. At the time of the reports, the total value locked (TVL) in Bitcoin DeFi applications was approximately $5.5 billion, having surged from around $704 million in October 2024 to over $9 billion by October 2025 before retracing.
Fireblocks clients will gain access to a suite of specific DeFi services via Stacks, including Bitcoin-denominated rewards, Bitcoin-yielding vaults via Hermetica, BTC-backed loans via Zest and Granite, and BTC-native trading via Bitflow. This enables institutions to earn yield on Bitcoin holdings without selling the underlying asset, tapping into what proponents see as a massive, largely idle market given Bitcoin's over $1.45 trillion market cap.
The integration is viewed as a significant milestone for the Bitcoin L2 ecosystem. While Ethereum dominates DeFi, Bitcoin represents a vast untapped market. However, analysts like Markus Bopp, CEO of Trac Systems, caution that the growth of second layers and DeFi on Bitcoin could pose challenges to the base layer's decentralization.
