The post Unlocking the potential of dormant Bitcoin in DeFi appeared on BitcoinEthereumNews.com.

Opinion by: Amitej Gajjala, co-founder and CEO of KernelDAO Bitcoin is the principal asset of the cryptocurrency world and even one of the world’s top 10 most valuable assets, recognized for its role as a store of value. Yet a huge percentage of the Bitcoin (BTC) supply remains dormant for years, meaning the crypto market only works with a fraction of the circulating supply each year.  This idle Bitcoin has an enormous amount of untapped financial potential. Bitcoin’s principal narratives are “store of value” and “never sell.” Today’s decentralized finance (DeFi) tools, however, enable yield gain by holding Bitcoin and taking advantage of dormant Bitcoin, which just sits in investors’ wallets and does nothing.  Existing dormant Bitcoin is not being fully utilized  Dormant Bitcoin has not been used for long periods, usually one or more years. According to Glassnode, as of early 2025, the active supply that has not moved in more than one year is approximately 62%. This Bitcoin is held in wallets that show no activity on the blockchain and remain inactive for various reasons. These could be intentional long-term holding strategies or even permanent loss as a result of negligence or the death of their users.  Let’s put aside the rest of the reasons and focus on long-term Bitcoin holding strategies. The existence of this group implies that they could enter the market at any time, producing significant volatility in the price of Bitcoin. Why aren’t we using that Bitcoin in DeFi right now?  Activating dormant Bitcoin will make waves in the market If large quantities of dormant Bitcoin were to reactivate immediately, it could significantly affect the cryptocurrency market, creating a noticeable event. These movements could dramatically affect Bitcoin’s price in a negative way due to potential selling pressure and influence the market with a significant…

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Filed under: News - @ April 21, 2025 11:27 pm