2026-01-16 05:21:01

This bull market seems to be driven by institutions, but the real show is still to come—the era of institutional-scale lending is about to begin.

BTC has long been de-commoditized, with most coins flowing into institutional hands. As the most valuable and largest collateral, BTC should be continuously flowing into DeFi as before, releasing liquidity through lending. But reality has hit a snag.

The problem is quite painful: retail investors have no coins, leaving no room for operation; institutions hold the coins but are instead constrained by regulations. Two shackles—first, the constraints of the regulatory framework; second, the tug-of-war over compliance bottom lines. This has prevented BTC's collateral function from being fully unleashed.

Institutions want to amplify returns through large-scale collateralized lending, but the regulatory environment has not yet fully opened the door for this model. Once this bottleneck is broken, the next phase of the institutional bull market will truly kick off. Currently, this tension is causing a tug-of-war between the market and policy.

BTC-0,16%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

20 Likes

Reward
20
7
Repost
Share

Comment

0/400

DegenWhisperer

· 01-17 04:13

As long as regulation doesn't loosen for a day, institutions will be constrained for a day... This is the real bottleneck.

View OriginalReply0

HodlAndChill

· 01-16 16:28

Once regulation loosens, institutions will take off.

View OriginalReply0

ser_ngmi

· 01-16 05:51

When will the regulations truly relax? I've been waiting for that day so long that even the flowers have withered.

View OriginalReply0

SocialFiQueen

· 01-16 05:49

Retail investors are really out of the game completely, it's a bit heartbreaking. Institutions holding coins but being locked down by regulators—that's the real dilemma. Once compliance opens the door, that's when the main upward wave begins. The value of BTC as collateral hasn't been fully unleashed yet. Waiting for policies to loosen up a bit, then we'll see what true madness looks like.

View OriginalReply0

MoonMathMagic

· 01-16 05:45

Retail investors got wiped out, and the institutions are just getting started? This logic feels so familiar. The day leverage lending opens up, we better hide well again. Regulation is really a double-edged sword; it blocks liquidity and also blocks our opportunities. DeFi has been waiting for BTC transaction volume, but it got stuck on the policy hurdle. Once institutional lending models really take off, I wonder what kind of market movements will emerge.

View OriginalReply0

GraphGuru

· 01-16 05:42

Retail investors have really become spectators; the coins are all taken by institutions. As long as regulation isn't relaxed for a day, the borrowing and lending system for institutions can't get off the ground... So, the key still depends on how policies shift; it feels like that's the real trigger. BTC as collateral should be fully utilized, but now it's just trapped. The real explosion point will be when regulation opens the door, right?

View OriginalReply0

AltcoinTherapist

· 01-16 05:41

Retail investors have really become outsiders now, with no coins in hand, they can't play. --- Regulation, on the one hand, is said to be protection; on the other hand, it's a chokehold. Institutions have coins but can't act, really holding gold bars but unable to use them. --- When regulation finally relaxes, that's the real harvest moment. Currently, it's just waiting and holding back. --- So it's still early, right? Institutions haven't fully opened up to play yet; the big moves are still to come. --- Coins are in institutions' hands, but so are the shackles. This is the current deadlock, and who wins depends on policy decisions. --- The DeFi lending drama hasn't truly started yet; the prelude isn't over. --- It seems institutions are also quite helpless. They have money and coins but just can't enjoy it; regulation is tightly blocking them. --- If this tension isn't resolved, the bull market will always be just a semi-finished product. Let's wait and see when policies will loosen.

View OriginalReply0