Liquid Bitcoin Redemptions Still Frozen as Reserve Coverage Sits at 85.8%
(3 hours ago) · 1 source · Summarized by CryptoBipto
Redemptions on the Liquid Bitcoin sidechain remain suspended, with the platform reporting only 85.8% reserve coverage backing user deposits. The shortfall means not all users can redeem their holdings on a one-to-one basis. The situation remains unresolved, with no confirmed timeline for restoring full redemptions.
WHY IT MATTERS
Think of a sidechain like a coat check at a restaurant. You hand over your coat (bitcoin) and receive a ticket (L-BTC) that you can use to get your coat back later. In this case, the coat check has admitted it does not have enough coats to return to everyone — only about 86 out of every 100 coats are still there, and the coat check window is closed. For people new to crypto, this is an important lesson about the difference between holding bitcoin directly and holding a tokenized version on another network. When you move your crypto onto a sidechain or give it to a third party, you are trusting that entity to keep your assets safe and available. That trust can sometimes be broken, which is why many in the crypto community emphasize the principle of self-custody — holding your own keys on the main network.
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