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The amount of BTC supply wrapped in Ethereum has doubled. but why exactly is this happening?

DeFi’s development has helped Ethereum price and other ERC-20 tokens grow quite well in recent times. It has prompted even Bitcoin holders to “wrap” their BTC in Ethereum. The amount of BTC offered in Ethereum doubled in August alone, but why exactly is this happening, and what does it mean for Bitcoin?

the-amount-of-btc-supply-wrapped-in-ethereum-has-doubled-but-why-exactly-is-this-happening

What impact will the explosive DeFi trend have on significant cryptocurrencies, mostly on Ethereum price?

The gossip surrounding DeFi has breathed new life into the crypto market, but no cryptocurrency has benefited more than Ethereum. As a result, Ethereum has grown by more than 200% annually.

The DeFi group has created a thriving sub-industry where crypto insiders speculate on assets they know are potentially “worthless” but are nonetheless willing to risk capital.

So far, insiders have made a lot of money. Several DeFi projects have risen in rankings in the top 100 cryptocurrency markets, while such a token has now more than tripled its current price per BTC.

The number of ETH tokens locked in DeFi has skyrocketed throughout the year. Now, Bitcoin is following a similar path, with the amount of BTC offered in Ethereum doubled in just August.

But what is the reason for crypto investors to move their Bitcoin to Ethereum, and how does this benefit holders compared to traditional BTC?

As the first-ever cryptocurrency, it was designed to be a peer-to-peer electronic replacement for cash. The altcoins that came after its creation have a lot more tricks up their sleeve. Ethereum’s smart contracts allow it to do a lot more than Bitcoin can.

Ethereum can also lend some of its abilities to Bitcoin by “wrapping” each BTC.

Each WBTC is an ERC-20 smart contract tied 1: 1 to a corresponding BTC asset. As for why anyone would do such a thing, wrapping BTC this way bestows it some of the attributes of an ERC-20 token.

For example, it allows Bitcoin to be lent out in DeFi apps or to be traded on decentralized cryptocurrency exchanges.

Bitcoin is arguably the biggest and, therefore, the best cryptocurrency. But by wrapping it in Ethereum, it makes a good thing even better and teaches this old dog a few new tricks.

The ability to wrap BTC has been around for some time, but the recent DeFi lending buzz and explosion of Uniswap has made wrapping BTC far more attractive. It also has the side effect of making the leading cryptocurrency by market cap far more versatile.

Could the ultimate cryptocurrency be WBTC? Rapidly rising supply at least says it has growing merit and could become even more attractive in the future.

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