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Wrapped Bitcoin: Everything you need to know

WBTC

Source; CoinMarketCap

For a long time now, we have been in a world which is rapidly moving towards digitalization in all possible sectors across the globe and the cryptocurrency industry is the one responsible for revolutionizing the entire global payment system. Crypto has been around for quite some time now has had a surge in its overall growth and popularity recently, thus reaching greater heights!

Having said that, I believe, most of you are already familiar with the basics of the industry but, if for some reason that is still not the case, let me help you with that first.

To begin with, cryptocurrency is simply a form of virtual or online currency which just like physical money, can be used for a variety of purposes including the buying and selling of goods and services as well as for the purpose of trade and exchange over cryptocurrency exchanges available online.

In technical terms, the crypto world is nothing but a blockchain-based platform that is said to be decentralized to its very core. Now, being decentralized, the crypto world becomes more than capable of stepping outside the overall control and jurisdiction of central authorities and can work freely without any unnecessary government interference as well.

When the industry was first brought in, there were obviously not many currencies to choose from and honestly, not many people were looking to be a part of it either. Naturally so, as people back then were very skeptical in respect to the safety of their money as well as the return on their investments.

WBTC

Source: Medium

On the contrary, looking around today, you will be able to witness as to how far the industry has come since when it was first introduced, with a pool of currencies available today in the marketplace for you to choose from, with newer ones coming in with each passing day and tons of new investors joining in every hour.

Speaking of a lot of currencies available today in the marketplace, some of the most popular ones worth investing in includes Ethereum, PancakeSwap, Bitcoin, Cardano, Dogecoin, Binance Coin, Baby Doge as well as Polkadot to name just a few of course.

Seeing such extraordinary success, one thing that comes to mind is, what could be the reason for this to happen so rapidly? If so, let me tell you that, some of the major contributing factors for this huge success of the industry include the convenience it offers, ease of use, high-profit margins, negligible response time, volatility, real-time updates as well as its intuitive nature of the course.

Being volatile, it is important for you to be aware of the fact that, it is not always possible to predict the price changes and act accordingly as the price fluctuations in the crypto marketplace are almost immediate, thus leaving no time to plan. Therefore, whenever dealing in online currencies, keep in mind that, if the industry is providing you with an opportunity to earn huge profits and make quick money, if not done right, you could also end up having significantly huge losses as well.

Now that you have a brief backstory about the crypto world, you will be able to have a much better understanding of what we have with us today, Wrapped Bitcoin. To know more, I suggest you read further!

Everything to know about Wrapped Bitcoin (WBTC)

WBTC

Source: Moralis Academy

Wrapped Bitcoin or as commonly referred to as WBTC is nothing but a tokenized version of Bitcoin (BTC) that is said to run on the popular Ethereum blockchain. In other words, Wrapped Bitcoin is simply an Ethereum token that is intended to represent Bitcoin on the Ethereum blockchain.

It is not Bitcoin, but rather a separate ERC-20 token that is said to have been designed in order to track Bitcoin’s value. Not just that, being compliant with ERC-20, WBTC is capable of fully integrating into the Ethereum ecosystem of decentralized exchanges, prediction markets, crypto lending services as well as other ERC-20 enabled decentralized finance (DeFi) applications.

For some of you wondering, what exactly are wrapped tokens? Allow me a chance to explain. Wrapped tokens are just virtual currencies that are pegged to the value of another original crypto or several assets like shares, real estate, gold and stocks to be put to work on DeFi platforms.

Basically, just think of it as, you are already familiar with Bitcoin and really keen to start with the applications of decentralized finance. But there is a problem that, there isn’t much of a cryptocurrency bridge that is connecting Ethereum with Bitcoin. This is where Wrapped BTC comes into the picture as it is able to deliver some much-needed liquidity to DeFi protocols.

Before moving on any further, it is worth noting that, the wrapped tokens project, of which WBTC is just a part, was not really founded by individuals but is known to rather be a joint project of majorly three organizations including Ren, BitGo as well as Kyber Network. On a similar note, Wrapped Bitcoin was first introduced on October 26, 2018, and was officially released about two years ago, back on January 31, 2019.

Also, WBTC that we have been talking about is the native utility token of Wrapped Bitcoin, which as a matter of fact, can be used for a variety of purposes on the platform itself, like allowing Bitcoin holders to be a part of decentralized finance applications that are popular on Ethereum and more. As mentioned, WBTC is a new innovation that is said to effectively bring BTC to the Ethereum blockchain.

WBTC

Source: Phemex

Not just that, this financial instrument provides institutions, traders, as well as decentralized applications a bridge to the Ethereum network, while also being able to maintain exposure to Bitcoin. The primary focus of the platform is to bring Bitcoin’s price value into play and merge it with Ethereum’s programmability.

In addition to this, you should probably be aware that, each WBTC is an ERC-20 token that is said to represent Bitcoin on a 1:1 basis through a network of automatically monitored custodians and merchants, thus ensuring that its price is pegged to Bitcoin at all given times and allow users to transfer liquidity amongst ETH network and BTC in an autonomous and decentralized manner.

Also, users on the platform can easily convert any Bitcoin over to WBTC with the help of several networks that are available to the public today, while being able to convert their WBTC back to the traditional Bitcoin as and when they desire.

As a result, this flexibility allows users to effortlessly bounce between BTC and WBTC in order to suit their investment strategy. Apart from this, through a WBTC partner, 1 Wrapped Bitcoin can be exchanged for 1 Bitcoin and vice versa.

What makes Wrapped Bitcoin special?

WBTC

Source: Cointelegraph

Being the largest and oldest cryptocurrencies in the global marketplace, Bitcoin can boast a massive user base and a liquidity pool of several dozen billion dollars. However, as a matter of fact, its overall blockchain functionality is relatively basic by modern standards.

On the other hand, when compared to Bitcoin, Ethereum was built from the ground up in order to support more advanced use cases by simply making use of the technology of smart contracts, thus giving rise to an entirely new industry known as decentralized finance.

By wrapping Bitcoin in the ERC-20 standards, WBTC is known to enable full integration of Bitcoin-like assets into this advanced environment of financial DApps, thus bringing along the immense liquidity that is known to be associated with the Bitcoin market.

Furthermore, WBTC is said to make it significantly easier for exchanges, payment services as well as wallets that work with Ethereum as instead of running two separate nodes for BTC networks and ETH, they will be able to support WBTC operations with just an Ethereum node.

Lastly, the faster average block time of the Ethereum blockchain, which is nearly 15 seconds vs 10 minutes respectively, helps in increasing the speed with which Wrapped Bitcoin can be transacted as and when compared to actual Bitcoins for that matter.

Now that we have talked much about Wrapped Bitcoin, some of you must be wondering, whether or not it is a good idea to invest in the platform? If that’s the case, then let’s find out, shall we?

Investing in Wrapped Bitcoin (WBTC)

WBTC

Source: TheNewsCrypto

As of today, the price of Wrapped Bitcoin is about 35,830.34 US dollars with a twenty-four-hour trading volume of 452,092,461 dollars. Not just that, in just the past twenty-four hours, the value of Wrapped Bitcoin has down by 7.85 percent, and with the current market cap of 9,681,629,296 US dollars, WBTC is currently placed at #18 position as per the CoinMarketCap rankings.

Also, it is worth mentioning that, the current circulating supply of Wrapped Bitcoin is 270,208 WBTC coins, but unfortunately the maximum lifetime supply of the token is not yet available. In just the past week alone, the price of the platform has fallen by 15.67 percent.

Reading so far, you must have gotten a fair understanding of the platform and by now, you should be able to figure out on your own whether or not investing in Wrapped Bitcoin is the right thing for you to do. Seeing what it has to offer when combined with its performance in the recent past as well as its plans for the near future, I certainly believe that Wrapped Bitcoin can prove to be a profitable investment in the near future, which is likely to provide you with higher returns and it is a possibility that your current investment may increase in value. But again, nothing can be said or sure!

WBTC

Source: Nomics

If still not convinced, see it this way that, if say you buy Wrapped Bitcoin worth a hundred dollars today, you will receive nearly 0.00280 WBTC. According to the analysis done by experts on the field, after five years of your investment, the return is expected to be about +453.29 percent and thus, your current hundred-dollar investment will be nearly 553.29 US dollars in 2026.

As mentioned at the very beginning, crypto is a highly volatile marketplace and is extremely uncertain. Thus, It is very important for you to understand the fact that just like any other currency in the crypto marketplace, Wrapped Bitcoin does have its own risks as well and you should invest only if you are willing to take those risks and bear any and all losses if at all necessary.

If you are wondering, where can you buy Wrapped Bitcoin? Let me help you with that. Currently, Wrapped Bitcoin is available on all major crypto exchanges but, some of the popular exchanges that have WBTC listed on them include Huobi Global, Binance, OKX, FTX as well as KuCoin to name a few.  

In conclusion, what are your thoughts on Wrapped Bitcoin? Do let us know in the comments area below. To know more about various cryptocurrencies, do check out other articles we have on our website. Thank you for your time & if you found our content informative, do share it with your investor friends!

Also read: Shping: Everything you need to know

 

 

 

 

 

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