As a seasoned crypto investor with years of experience navigating the volatile and ever-evolving digital asset landscape, I find myself intrigued by the latest developments surrounding Wrapped Bitcoin (WBTC). Despite the occasional criticism and community backlash, WBTC continues to dominate the tokenized BTC market, holding over 65% of the market share. Its partnership with BitGlobal and Justin Sun has certainly expanded its operations and redesigned its custody structure, which is a positive step forward in my opinion.
Despite some criticisms surrounding it, Wrapped Bitcoin (WBTC), a Bitcoin variant created by BitGo, Kyber Network, and Ren, remains dominant in the realm of tokenized Bitcoin markets, as per Binance Research’s recent monthly analysis.
On platforms like Ethereum and Solana, the encapsulated token stands in for Bitcoin, maintaining a 1:1 equivalence. In this manner, users can interact with Bitcoin within the realm of decentralized finance.
WBTC Holds Over 65% of Market Share
According to Binance Research, WBTC‘s weekly transaction count reached a new peak of 123,200 and surpassed 100,000 for multiple weeks in a row for the very first time. Additionally, the supply of WBTC has grown to over 152,400, accounting for more than 65% of the market share.
The impressive performance of WBTC right now can be attributed to a number of factors, one being the strategic alliance in August with BitGlobal, Tron founder Justin Sun, and others. This collaboration was intended to extend WBTC’s reach into international markets such as Hong Kong and Singapore. Additionally, the partnership aimed at revamping the custody structure of WBTC.
Despite Sun’s participation in the joint force, some members of the cryptocurrency community voiced criticism. To address concerns, BitGo’s CEO, Mike Belshe, reassured users that the Tron founder does not have unilateral control over moving funds. Following this backlash, crypto projects such as Sky (previously known as MakerDAO) suggested removing WBTC from its collateral in response to the criticism.
Following weeks of backlash from community members, several new entities introduced their version of tokenized Bitcoin. Notable among these is Coinbase’s cbBTC, a Bitcoin derivative launched on Ethereum and Base. Soon after its introduction, cbBTC swiftly rose to become the third-largest wrapped Bitcoin in circulation.
Ethereum Becomes Inflationary
“One finding from the recent market report indicates that Ethereum appears to be experiencing increased money supply (inflation) at present. In fact, this level of inflation hasn’t been observed for the past two years.
According to Ethereum, it’s designed to operate using a sound-money system, which means less inflation and increased buying power for Ether (ETH). However, Binance Research’s findings suggest that Ethereum may be moving away from its deflationary state.
After the Dencun update, there was a decrease in transaction costs on the network, leading to fewer Ethereum tokens being destroyed. With the daily issuance rate of Ethereum reaching around 0.74%, financial analysts think that the coin could be moving into an inflationary phase.
As a researcher, I find myself intrigued by Binance Research’s prediction that an uptick in mainnet activity could lead to the platform regaining its deflationary stance. This means that increased usage could potentially reduce the circulating supply of the cryptocurrency, making it scarcer and theoretically more valuable.
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2024-10-06 17:38