Unlocking the potential of dormant Bitcoin in DeFi
Bitcoin, a leading cryptocurrency and a top global asset, has a significant portion of its supply dormant, with approximately 62% remaining inactive for over a year. This idle Bitcoin represents untapped financial potential. Current decentralized finance (DeFi) tools can leverage dormant Bitcoin for yield generation, enhancing its utility beyond being a mere store of value. Reactivating this Bitcoin could create market volatility due to increased circulating supply but could also provide liquidity if reintegrated into DeFi ecosystems. The U.S. government's Bitcoin strategic reserve could utilize its holdings for restaking in DeFi, generating rewards without selling. Currently, Bitcoin's total value locked (TVL) in DeFi is over $5 billion, only 6% of the total across all blockchains. Activating dormant Bitcoin could unlock billions in liquidity and enhance stability in DeFi. Restaking offers a conservative investment approach, allowing Bitcoin holders to earn passive income while supporting network security. Integrating dormant Bitcoin into DeFi presents significant opportunities for stability, liquidity, and growth within the ecosystem.
