Wrapped Bitcoin ‘Burns’ Outpaced Minting for the First Time in December
BitGo “unwrapped” over 11,600 WBTC last month.
Jan 9, 2021 at 6:40 p.m. UTCUpdated Mar 2, 2023 at 10:45 p.m. UTC
:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindeskuat/G5DSRNSAGFCWTEMJ7OPMYQB3IU.png)
Traders are swapping their tokenized bitcoins for the real thing more than ever.
STORY CONTINUES BELOW
- BitGo saw a record 11,613 wrapped bitcoin (WBTC) swapped for real bitcoin (BTC) in December, with only 2,731 BTC exchanged for the bitcoin-backed ERC-20 tokens last month.
- December marked the first time in the young project’s history that “burns,” the reversion of WBTC back to BTC, have outnumbered “mints.”
- The total value of the “burned” WBTC is approximately $235 million, based on bitcoin’s price at the time the tokens were swapped for BTC.
- Diminishing yields in decentralized finance (DeFi), a primary use case for WBTC, and increased trading activity on traditional cryptocurrency exchanges amid bitcoin’s recent eye-popping surge are likely reasons for the increase in burns and slowed rate of minting.
- Most of the burns came from trading firms Alameda Research and Three Arrows Capital.
- BitGo’s Wrapped Bitcoin project gained wide popularity through Q3 and early Q4 2020 amid a DeFi frenzy that saw over 124,000 BTC tokenized on Ethereum at its peak after starting the year with less than 600 BTC.
- In mid August, demand for WBTC was so high that bitcoins were being tokenized faster than they were being mined.
- To date, roughly 110,000 WBTC are still circulating in the DeFi ecosystem.
13:18
Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
05:10
Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
04:07
The first video of the year 2024
40:07
The last regression video of the year 3.67.0
:format(webp)/downloads.coindesk.com/arc/failsafe/user/1x1.png)