Supporting Bitcoin Development During Market Downturns
How nonprofits like OpenSats sustain Bitcoin open-source development when markets crash, and why this funding matters for long-term security.
When Bitcoin dropped 60% in 2022, developer James O'Beirne sounded an alarm: the industry was at risk of losing critical talent as corporate funding dried up and crypto companies filed for bankruptcy. It's the kind of warning that gets forgotten when prices recover, but the underlying vulnerability remains.
Bitcoin has no central development authority, no corporate parent, no foundation with a war chest. The protocol that secures hundreds of billions in value depends on a loose network of independent developers funded primarily through grants and donations. When markets crash, that funding gets tested.
The Funding Landscape
Bitcoin development relies on a handful of organizations: Brink (the top Bitcoin Core funder), Spiral (which has distributed over $7 million in grants historically), OpenSats, Btrust, the Human Rights Foundation, Chaincode Labs, and a few corporate sponsors like Coinbase and OKCoin.
This decentralized model has strengths. Steven Lee of Spiral has argued that having multiple independent funders means no single entity's financial troubles can halt development. When one source scales back, others can fill gaps.
The data supports some optimism here. Despite the 2022 market carnage, monthly active Bitcoin developers actually tripled to roughly 1,000 between 2018 and 2022, according to Electric Capital's developer reports. Bear markets didn't stop growth; they just made it harder.
How Nonprofits Weathered 2025-2026
The recent downturn put this model to the test again. Bitcoin fell approximately 30% from its highs, ETF outflows hit $4.57 billion in late 2025, and funding rates turned deeply negative. The bearish sentiment was unmistakable.
Yet the grants kept flowing. In December 2025, Btrust awarded starter grants to six developers, with a notable focus on talent from the Global South. The Human Rights Foundation followed in January 2026 with 1.3 billion sats (roughly $1.3 million at the time) distributed to 22 projects. OpenSats continued its grant waves through February 2026, funding 17 projects in areas like Rust-Bitcoin development and Stratum V2 mining decentralization.
This persistence matters. Bitcoin's security depends on ongoing protocol work, and the projects being funded aren't glamorous. They're things like formal verification tools, privacy improvements through ecash implementations like Cashu, and infrastructure that keeps mining decentralized.
The Case for Sustained Funding
ARK Invest made the argument plainly in 2024: underfunding Bitcoin development creates real risks to security and decentralization. This isn't hypothetical. The codebase needs constant maintenance, review, and improvement. Bugs need to be found before attackers find them.
The counterargument is that Bitcoin's core protocol is mature and changes slowly by design. Not every cryptocurrency needs the same pace of development. But "mature" doesn't mean "finished," and the ecosystem around Bitcoin (Lightning, privacy tools, mining infrastructure) requires active work.
Individual donors and Bitcoin holders can play a role here. OpenSats operates as a 501(c)(3) nonprofit, meaning donations are tax-deductible in the US. Jack Dorsey has been among the larger donors, contributing $10 million to OpenSats and $5 million to Brink over five years. But the organization's General Fund and Long-Term Support grants depend on ongoing contributions from the broader community.
What This Means Going Forward
Market downturns will happen again. The question is whether the funding infrastructure can weather them without losing the developers who understand Bitcoin's codebase deeply enough to maintain it.
The evidence so far is cautiously encouraging. The multi-entity model has proven more resilient than a single foundation might be. Nonprofits with diversified donor bases have continued operating through multiple bear markets.
But resilience isn't guaranteed. If you hold Bitcoin and care about its long-term viability, understanding who maintains the protocol and how they're funded isn't optional. It's part of what you're actually holding.