Ethereum-based ERC-20 token Wrapped Bitcoin (WBTC) has seen 192% growth so far this year, ranking 306th in market capitalization.
Wrapped Bitcoin, known as WBTC was launched in January 2019. As a means through which investors can avail decentralized finance (DeFi) on Ethereum using their Bitcoin cryptocurrency.
This token is backed 1:1 by the most important and widely used cryptocurrency of all. That is, 1 WBTC equals 1 BTC. Which currently hovers around $9.500 per unit, as of the date of this publication.
The creation of this token makes it possible to transfer the liquidity that Bitcoin has to the Ethereum ecosystems. Therefore, it pursues the objective of capturing the advantages and benefits of the tokenization of this cryptocurrency. Such as, for example, the strengthening of both decentralized systems, the injection of funds and, of course, the multiplication of profits.
Now, this token was included on May 3 to the smart contracts platform MarkerDAO. Which increasingly guarantees Bitcoin an important role within Ethereum's DeFi. And which may probably be the reason for its current incredible growth.
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WBTC Market Cap Growth
In the month of May alone, the WBTC token had a growth of nearly 31% in trading volume. Where an average of close to 15 million dollars per day was observed. This data was revealed by the system Kyber Network compared to the activities recorded with the token during the month of April.
The data also reveals that the highest trading volume for the token was the result of the ETH/WBTC and WBTC/ETH pairs. In addition to the USDC/WBTC pair, which is also gaining popularity among investors.
The current trading volume enjoyed by WBTC places it at number 6 of the most traded coins within Kyber.
Likewise, according to data revealed by the data and analysis center, DeFiPulse, the BTC/WBTC pair reached an impressive figure of $37,5 million.
Source: DeFiPulse.com
An amount that now exceeds the amount of Bitcoin that are within the network Lighting Network. The arrival of Bitcoin via WBTC to Ethereum is a significant step for the cryptocurrency towards decentralized finance. And the fact that this asset is experiencing such tremendous growth as it is currently showing reveals the clear interest of investors in other digital assets other than Ethereum.
This trend is expected to continue and the asset is expected to double its growth by the end of the year.
What is Wrapped Bitcoin (WBTC)?
WBTC is a token backed by the Bitcoin cryptocurrency that was created with the purpose of providing greater liquidity to the Ethereum network.
Bitcoin is where the largest amount of trading volume takes place on centralized exchanges. Therefore, through this new token, the liquidity that Bitcoin has can be transferred to decentralized exchanges (DEX). This possibility allows users to manage their bitcoins on exchanges in a faster way. Thanks to the processing speed offered by the Ethereum network, which is greater than that of Bitcoin currently.
At the same time, WBTC enables the creation of smart contracts for Bitcoin. Facilitating the possibility of writing smart contracts that link to the cryptocurrency without problems. Therefore, with this implementation, we seek to achieve a strengthening and a higher level of development in both ecosystems.
Meanwhile, managing Bitcoin and Ethereum will no longer be a problem for dApps. The integration offered and guaranteed by WBTC allows the advantages of both cryptocurrencies to be combined, with WBTC operating through Ethereum nodes only.
Likewise, the way to obtain WBTC is very easy, and users can get them through a p2p exchange. To do so, the user must request the WBTC token from an exchange. Where a verification of the user's identity will be carried out, according to KYC/AML regulations. After verification, the user must transfer the amount of BTC to the exchange. While the exchange will return to the user the amount of WBTC corresponding to the exchange.
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