WBTC: The Cryptocurrency Backed by Bitcoin

WBTC is a cryptocurrency with a market cap of $3.5 billion that runs on Ethereum. WBTC is a token that is meant to represent Bitcoin and allows Bitcoin holders to interact with DeFi tools on Ethereum. In the past 24 hours, over $88 million-worth of WBTC tokens traded hands.
2. Kaiko, a blockchain-data firm, reported last week that the value of the token depegged from Bitcoin, losing its one-to-one value. The firm added that charts shared on Twitter claiming that bankrupt trading firm Alameda Research was the top WBTC merchant spooked investors who thought the token may not actually be backed by Bitcoin reserves.
3. However, Kaiko said that the reserves can be confirmed on-chain, and the token is backed by Bitcoin. Crypto custody firm BitGo is the main custodian of WBTC. BitGo’s COO Chen Fang said on Twitter that rumors WBTC wasn’t backed one-to-one by Bitcoin was “fake news.” Kieran Mesquita, a developer behind the DeFi privacy project Railgun, told Decrypt that for now, the depegging isn’t something to worry about. Mesquita said that WBTC hasn’t depegged significantly, and that it will continue to function as a way to bring BTC into DeFi on Ethereum. Kaiko reported that if WBTC loses its peg, it could bring more decentralization into the space, considering that the asset’s primary custodian is BitGo, a centralized firm.

By Evey Lovelace

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