Bitcoin News Today: Decentralized tBTC Bridge Challenges Centralized Rivals in Bitcoin Liquidity Race

Threshold Network has launched a major upgrade to its tBTC bridge, aiming to unlock $500 billion in institutional Bitcoin liquidity for decentralized finance (DeFi) protocols. The enhancement allows institutions to mint tBTC directly to supported blockchains-including Ethereum, Arbitrum, and Base-in a single transaction, eliminating gas fees and secondary approvals. Threshold's head of marketing, Rizza Carla Ramos, emphasized the shift from passive Bitcoin holding to active DeFi participation, stating, "You want your assets to generate profit for you," during an interview at Web Summit in Lisbon according to Cointelegraph. The upgrade leverages a 51-of-100 threshold signing model to ensure no single entity controls the bridging process, mitigating custodial risks.

The move comes as competitors like Wrapped Bitcoin (WBTC) and renBTC expand their reach. WBTC, the largest tokenized Bitcoin solution with a $13 billion market cap, announced its expansion to Hedera on Thursday, joining its existing presence on Ethereum. Hedera's institutional-grade network, which avoids frontrunning and miner-extractable value (MEV), is seen as a key differentiator. BitGo, a Hedera Council member and WBTC custodian, collaborated with LayerZero and BiT Global to enable cross-chain interoperability. "Bitcoin needs to move freely to reach its full potential," said Simon Baksys, vice president of business development at LayerZero according to PR Newswire.

Threshold's tBTC bridge has processed $4.2 billion in cumulative volume since its 2019 launch, though it lags behind WBTC's $13 billion in trading volume. While WBTC and renBTC rely on centralized custodians, Threshold's decentralized model appeals to institutions seeking transparency. The platform argues that tokenized Bitcoin can deepen liquidity in DeFi pools and lending protocols, enabling "sustainable yields" for BTC holders.

Hedera's integration of WBTC is expected to accelerate DeFi adoption by offering low-fee transactions and institutional-grade security. James Hodgkins, chief growth officer at HBAR, Inc., highlighted that the move allows "idle Bitcoin liquidity" to participate in DeFi without exposure to MEV or frontrunning according to PR Newswire. Analysts note that the expansion of tokenized BTC across multiple chains could reshape Bitcoin's role in global finance, bridging traditional and decentralized markets.