Bitcoin on DeFi Ethereum Nearly Halved in Less than 3 Months

Rising Bitcoin prices have people exchanging their tokenized bitcoins for real BTC.


The amount of Bitcoin locked in Ethereum has been moving in the opposite direction of the BTC price.

During the time Bitcoins' price surged 228%, the amount of BTC locked on Ethereum through decentralized applications (DeFi) decreased by 54%.

With a 22% drop in price over the weekend, BTC on Ethereum saw a slight uptick from 29.8k to 31.1k but still down from 64.9k on Oct. 22nd, excluding WBTC. A year back, a record 2.4 million BTC were locked in DeFi, as per DeFi Pulse. The biggest contributors to this are Compound, Curve, Aave, and RenVM.

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Wrapped Bitcoin, the first BTC-backed token issued on Ethereum, currently has 110,560 BTC wrapped, down from 124.5k BTC in mid-Nov.

Up until Sept., there has been a record amount of WBTC minting going on, as much as 9k in a single day. The biggest contributors to wrapping BTC on Ethereum have been Three Arrows Capital, Almeda Research, and Coinlist.

But now that the price of BTC continues to climb up, these BitGO clients have been exchanging their tokenized bitcoins for real BTC.

In December, more BTC was withdrawn from WBTC or burned than deposited in it for the first time ever. On Jan. 2nd, CoinList burned the highest amount of 5k WBTC.

Up until mid-November of 2020, a total of 5 burns of less than 1000 WTC happened, while ever since then, more than 3x of such burns have happened.

As of writing, 110,559 WBTC are in circulation with a market cap of $4.09 billion.

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