What Is Wrapped Bitcoin (WBTC)?
Wrapped Bitcoin (WBTC) is a tokenized version of the Bitcoin (BTC) blockchain that operates on the Ethereum network. WBTC is ERC-20 compatible, the Ethereum blockchain’s basic compatibility standard, and so can be fully integrated into the latter’s ecosystem of decentralized exchanges, crypto lending services, prediction markets, and other ERC-20-enabled decentralized finance (DeFi) applications.
WBTC is also backed by Bitcoin at a 1:1 ratio via a network of automatically monitored merchants and custodians, ensuring that its price is constantly linked to Bitcoin and allowing users to shift liquidity between the BTC and ETH networks in a decentralized and autonomous manner.
Wrapped Bitcoin (WBTC) was first announced on October 26, 2018, and it became operational on January 31, 2019.
The function of Wrapped Bitcoin(WBTC)
- The Wrapped Bitcoin protocol is maintained by the WBTC DAO, a decentralized autonomous organization comprised of 16 stakeholders. The WBTC ecosystem has around 40 participants, including DAO members, merchants, wallets, and exchanges.
- WBTC is issued by a custodian, which is one of the stakeholders, in this case, BitGo.
- It secures the safety of your token. The merchants are in charge of starting the WBTC minting process and sending Bitcoin to the custodian. The retailers are compensated with WBTC tokens.
- Customers may purchase WBTC from retailers such as CoinList. Before packaging your Bitcoin, they will do KYC checks to verify your identity.
- You’d have to go via a merchant to unwrap your Bitcoin or, in other words, burn WBTC. Merchants would request to burn WBTC in the same way they would mint it, and if validated, the custodian would pay the same amount of BTC to the merchant.
What Is The Best Time To Invest in WBTC?
Wrapped Bitcoin Price in India at writing time is $64,622.56 with a 24-hour volume of $117,660,400. In the previous 24 hours, wrapped Bitcoin has gained 1.08%.
With a live market cap of $15,453,328,454 USD, CoinMarketCap now ranks #16. There are 239,132 WBTC coins in circulation, and the maximum supply is unknown.
For a variety of reasons, the notion of WBTC continues to gain traction in the market. First and foremost, no one wants to exchange their Bitcoin (BTC), especially now that it is at its all-time highs. WBTC allows long-term investors to receive passive income without giving up control of their precious digital assets.
As a result, additional WBTC is expected to join the market in the following weeks.
Based on our forecasts, a long-term increase is expected; the price prognosis for 2026–07–11 is 235290 US Dollars. With a 5-year investment, the revenue is expected to be around +636.41%. — Wallet Investor
Digital Coin Price
According to our Wrapped Bitcoin forecast, the WBTC price might cross $47,525.03 by the end of 2021 and $93,731.58 by 2025, making it a profitable investment.
Is WBTC A Good Investment in 2021?
Wrapped Bitcoin provides several advantages over Bitcoin and other cryptocurrencies. The Ethereum blockchain’s encompassing support is what provides WBTC an advantage over the competition. However, there are certain drawbacks, such as the time it takes for blockchain and cryptocurrencies to reach the public.
The advantages, on the other hand, clearly exceed the hazards. WBTCs are a smart investment for some reason.
1. Collaboration With The Ethereum Blockchain: In terms of any cryptocurrency, Ethereum has the broadest ecosystem. Because of its wide reach and special features such as dApps, DEXs, and games, the combination of Bitcoin and Ethereum is advantageous to users. Bitcoin users may receive access to decentralized finance with this connection without risking any of their Bitcoins.
2. Liquidity: Because of Ethereum, the liquidity provided by WBTC is diversified and spread out. This is especially true given recent examples of how certain functionaries, such as decentralized exchanges, lack the necessary liquidity to perform at their full capacity. In the case of WBTC, this deficiency does not arise at all, ruling out the possibility of operating in a less-than-optimal manner.
3. Scalability: Another significant reason why this investment is so attractive is the wrapped Bitcoin’s flexibility or scalability. WBTC is stored in the Ethereum blockchain rather than the Bitcoin blockchain after wrapping. This facilitates and reduces transaction costs.
4. Decentralized Finance: The introduction of DeFi cleared the door for WBTC. It has shifted the financial system from centralized to decentralized. In the case of popular applications like Compound, users have been given the ability to substitute banks and have been given the option of supplying liquidity in exchange for incentives.
5. Improved Functionality: As previously said, the connection with Ethereum has provided Bitcoin users with a plethora of new options. They may use WBTC by utilizing features like smart contracts. This is a feature that BTC lacks. Smart contracts, which are self-executing pre-programmed protocols, have given the blockchain sector a huge boost.
6. Yield Farming: Another DeFi protocol that allows users to lend out their cryptocurrency in exchange for interest is this one. For many, it is a source of passive income that is not provided by any other blockchain industry. This, among other things, is possible using the popular app Compound.
Why Invest In Wrapped Bitcoin (WBTC)?
Your requirements and portfolio plan will determine whether WBTC is a good investment. It’s worth noting that WBTC is pegged to the price of Bitcoin, therefore it costs the same as BTC. WBTC might be a good investment if you believe it can become the primary version of tokenized Bitcoin and you expect the price of BTC to climb in the future.
It’s critical to think about your requirements and ambitions while investing money.
A Wrapped Bitcoin (WBTC) is referred to as a tokenized form of cryptocurrency that is backed by the original coin. Wrapped Bitcoin (WBTC) is a cryptocurrency that is intended for usage on Ethereum-based services. When WBTC tokens are redeemed with trusted merchants, they are destroyed. Before you decide to invest in wrapped bitcoin, think about your requirements and aspirations.