Wrapped Bitcoin (WBTC) is an ERC20 token that is a converted form of Bitcoin. This lets bitcoin holders gain access and use tokenized bitcoin known as WBTC in Ethereum-powered decentralized apps. WBTC is incorporated into Ethereum’s dApps, wallets, and smart contracts that help BTC holders access wider financial services in Ethereum’s growing DeFi ecosystem. Bitcoin can be readily swapped to WBTC and vice-versa. This simple advantage is vital for every Bitcoin user and motivation for every developer to expand the concept even further.

This multi-constitutional project is being managed by the WBTC DAO (decentralized autonomous organization). The DAO, with 16 initial members, makes joint decisions including adjustment to the smart contract that mints WBTC or adding/eliminating its members.

With Wrapped Bitcoin, transactions are faster and way cheaper. This made WBTC the top tokenized BTC asset. Wrapped Bitcoin is being traded on 66 crypto exchanges and can still increase in the future.

WBTC Breakdown

WBTC is a joint initiative of various decentralized exchanges and applications. Tagged as the first ERC20 token that is fully backed by BTC at a one-to-one ratio and represents a custodian model of Bitcoin tokenization. This means whenever a new BTC is minted, BTC is obtained from the user and kept in reserve by a custodian. WBTC currently has 189,000 circulating supplies and a max supply of 196,000.

The idea of the WBTC project is to enhance the ease of use and serviceability of Bitcoin, it functions as a link between Bitcoin and the Ethereum blockchain. By letting Bitcoin into Ethereum through WBTC, in return, the protocols get a rise in liquidity and can help yield more funds for their dApps.

Wrapped Bitcoin has a market cap of $6 billion, thus, holding the 18th rank per market value rating. This momentous rise in WBTC’s rate gives it the impression that this asset is a good business resource to take advantage of.

Wrapped Bitcoin History

WBTC was brought to the Ethereum mainnet in January 2019 as a collaborative project initiated by BitGo Inc., Ren (formerly known as Republic Protocol and Kyber Network. This is a joint effort of these 3 organizations to bring Bitcoin's value to Ethereum’s ecosystem. WBTC became a tool that enables easy migration of Bitcoin’s value to Ethereum. Eight initial merchants facilitate the exchange between WBTC and BTC.

In May 2020, WBTC was authorized as the fourth collateral asset by the MKR holders on MakerDao. The month of May was indeed a significant event for WBTC as remarkably 4 million DAI tokens were minted in just 24 hours using WBTC as collateral.

In January 2021, Wrapped Bitcoin became one of the top ten digital assets by market cap. This great breakthrough has paved the way for Bitcoin holders in the Defi markets. In the same month, TRON launched WBTC on its blockchain as TRC20 tokens. As WBTC continues to flourish, lots of blockchains and networks now invest in this token including Genesis Block and Mainnet.

WBTC Price Factors

WBTC rate gets driven by the value of Bitcoin as its price is pegged to be the same. So, most of what is affecting Bitcoin affects the WBTC’s price. Wrapped Bitcoin is gaining its momentum, as it gets more breakthroughs and partnerships with other blockchain gives WBTC’s rate an upward trend.

Availability

As the number of merchants, wallets, and exchanges accepting Wrapped Bitcoin, so does the positive effect on WBTC’s rate. It can also get influenced by a notable increase in WBTC circulation, liquidity, and collaborations. Innovation like WBTC, definitely helped Bitcoin users engage and gain exposure to the Ethereum DeFi ecosystem. Proven to provide a shared incentive between Bitcoin and Ethereum.

Acceptance

WBTC is not the only tokenized version of bitcoin and there are certainly many competitors both old and new. However, due to the big partnerships of WBTC with large organizations, social acceptance of WBTC is high. Along with it is WBTC’s price. This makes WBTC one of the largest cryptocurrencies globally.

Government regulations and interventions

There are certain government regulations that prevent banks and other traditional financial firms from investing or allowing crypto transactions from happening. This also depends on the regulations set by the financial authorities that differ from each country. A few countries are already exploring cryptocurrency and its technology and others are banning it. So if Bitcoin is affected by any regulations, therefore Wrapped Bitcoin’s rate gets the same trend.

News in the media

News about Wrapped Bitcoin developments and new partnerships or big investors can really put in a positive effect on WBTC’s price. Hence, keeping updated on the latest WBTC news is a very important factor if you want to invest in it. You may also check on reliable crypto sites where news is being posted daily.

Trading WBTC

WBTC is gaining popularity and caught the interest of many investors due to its function on Ethereum’s huge ecosystem. To start trading, it is best to choose a reliable broker that supports Wrapped Bitcoin. If you want to use your own ETH tokens, you can select a decentralized exchange to convert them to WBTC. Before deciding which exchange to use, make sure to further check how much they charge for the transaction fee or if there’s any other miscellaneous fees involved. Once you choose a reliable WBTC trading site and add funds then you can move forward with your trade.

When trading Wrapped Bitcoin, it is vital to follow a strategy. You can conduct technical analysis on WBTC price charts to help you determine your next move and build your strategy. Wrapped Bitcoin charts are important when learning the WBTC’s past, present and future conditions. Also, study the crypto market well and monitor major events that can trigger a possible WBTC price spike, thus, creating trading opportunities.