In terms of market capitalization and number of minted coins, Wrapped Bitcoin (WBTC) hit all-time highs today.
WBTC’s Recent Rise
WBTC has established itself as the most common Bitcoin variant tokenized for usage on the Ethereum network. There is currently a record total of 116,885 WBTC, backed by an equivalent amount of BTCs owned by crypto custodians, according to the official website.
WBTC’s market value currently hovers around $1.58 billion according to Coingecko.
In the past week, WBTC climbed up the ranks to overtake Compound Dai (cDAI), OKB and Bitfinex. By market cap overall, WBTC is actually the 18th-largest cryptocurrency.
Behind Crypto.com Coin (CRO), USD Coin (USDC), Chainlink (LINK), BNB (BNB), and at number one, Tether USD (USDT), this renders WBTC the sixth-largest Ethereum token by market value.
An ERC-20 token supported by BTC deposits 1:1, WBTC accounts for 80 percent of the Ethereum network’s $2 billion worth of BTC. To place the rise in context, there were just 80,000 tokenized Bitcoins in mid-September, worth just under $1 billion.
Why Do We Need WBTC?
The WBTC adds greater liquidity, including decentralized exchanges (DEXs) and financial frameworks, to the Ethereum ecosystem. The bulk of the amount of trade today takes place on centralized Bitcoin exchanges. WBTC modifies it, adding the value of Bitcoin to DEXs and enabling Bitcoin to be used for token trades.
WBTC standardizes Blockchain to the format of ERC20, producing Bitcoin smart contracts. This makes it possible to compose smart contracts that implement payments from Bitcoin.
It may be onerous to establish separate nodes and handle transaction styles to accommodate various currencies. An Ethereum node only has to be managed by exchanges, wallets, and payment applications now.