Bitcoin News Today: Threshold's tBTC Bridge Unlocks $500B Institutional Bitcoin Vault

Threshold Network Powers Institutional Bitcoin Access With Upgraded tBTC Bridge

Threshold Network has launched a major upgrade to its tBTC protocol, positioning itself as a critical infrastructure for institutional Bitcoin participation in decentralized finance (DeFi). The update, announced on November 11, 2025, simplifies the process for institutions to deploy Bitcoin across DeFi ecosystems while maintaining compliance and custody security, as reported by Cryptonomist. This comes as institutional adoption of Bitcoin accelerates, with over $414 billion in BTC held by entities ranging from ETFs to corporate treasuries, per that report.

The upgraded tBTC bridge enables institutions to mint tokenized Bitcoin (tBTC) directly on supported chains—such as Ethereum, Arbitrum, and Sui—with a single Bitcoin transaction, eliminating multi-step processes and gas fees, per the Cryptonomist report. Redemption back to the Bitcoin mainnet is equally streamlined, preserving the asset's native simplicity and decentralization. MacLane Wilkison, CEO of Threshold Labs, emphasized that the protocol "connects institutional-grade Bitcoin to decentralized markets," bridging traditional finance's security standards with DeFi's innovation, as noted in the same report.

The upgrade addresses a key barrier for institutional adoption: operational complexity. Previously, deploying Bitcoin in DeFi required navigating custody risks and regulatory hurdles. Threshold's new architecture allows tBTC to be minted without physically moving BTC from insured custodial storage, aligning with compliance requirements, per the MEXC report.This innovation taps into a $500 billion pool of institutional Bitcoin, much of which has been locked in vaults due to stringent insurance and regulatory rules, as noted in the MEXC report.

The significance of this shift is underscored by recent market dynamics. Institutional Bitcoin holdings have surged since the approval of U.S. spot ETFs in 2024, with corporate reserves rising 40% in Q3 2025 to $117 billion, as reported by Cryptonomist. Threshold's tBTC now supports cross-chain liquidity across eight major networks, enabling institutions to access DeFi yields, lending protocols, and liquidity pools without compromising custody, as noted in the Cryptonomist report.

While Threshold's move is a breakthrough, broader DeFi liquidity remains constrained. Wintermute, a leading crypto market maker, reported a slowdown in stablecoin, ETF, and digital asset treasury (DAT) inflows, signaling a "self-funded phase" where internal capital rotation dominates, as reported by Bitcoin News. Meanwhile, U.S. Treasury issuance next week could further strain liquidity, with $125 billion in debt auctions set to test market resilience, as noted by Futunn News.

Threshold's tBTC protocol, however, is already gaining traction. With $640 million in total value locked (TVL), it ranks as the third-largest Bitcoin DeFi project, behind Lombard ($1.2 billion) and Babylon Protocol ($5.9 billion), per the MEXC report. The upgrade's gasless minting and vault strategies aim to deepen liquidity, attracting both institutional and individual users. Callan Sarre, Threshold's CPO, called the update a "maturity milestone," streamlining onboarding and reducing operational risks, as noted in the Cryptonomist report.

As DeFi infrastructure evolves, competitors like Ripple and Credix are also expanding institutional offerings. Ripple's U.S. prime brokerage services and Credix's $11.25 million funding round highlight growing demand for compliant crypto solutions, as noted in CoinDesk and CryptoNinjas. Yet Threshold's focus on Bitcoin-backed by a 51-of-100 threshold signature model-positions it uniquely to capitalize on the $500 billion institutional Bitcoin market, as noted in the Cryptonomist report.