Bitcoin liquidity faces tightening, how can DeFi protocols activate dormant capital?

【Crypto World】Key figures in the Federal Reserve policy circle recently raised an observation on social media worth noting: Bitcoin liquidity is contracting.

The reason behind this is quite clear. The amount of Bitcoin on exchanges is continuously decreasing. What does this mean? It indicates that a large portion of supply is locked in the hands of long-term holders. As the truly liquid Bitcoin in the market dimin’t decrease, every institutional demand becomes significant — this is a subtle shift in power.

However, a new solution to this problem has emerged. Through protocols like tBTC, holders can activate passive assets sitting in wallets and participate directly in productive activities on-chain. There’s no need for complicated intermediary processes or complex operational logic. Capital shifts from a simple storage state to an active asset capable of generating returns. This transformation could alter the microstructure of Bitcoin liquidity.