In June, 4,800 BTC were moved to Ethereum, at a total cost of $60 million. At the same time, the ERC-20 Wrapped Bitcoin (WBTC) token accounts for about 75% of these operations.
According to the research company Dune Analytics, the demand for using BTC in various decentralized financial services (DeFi) continues to grow. Some projects in the industry, such as MakerDAO, accept tokenized bitcoin as collateral.
“The recent trend should not be surprising. In addition, it is likely to continue, ” said Medio Demarco, a former employee of Deutsche Bank and co-founder of the research cryptocurrency firm Delphi Digital.
The growing popularity of tokenized bitcoin does not surprise Ben Chan, technical Director of BitGo, which led the initiative to launch WBTC. Recall that Wrapped Bitcoin is a token of the ERC-20 standard, which is a stablecoin fully backed by bitcoin.
“WBTC’s goal is to bring bitcoins to the world of decentralized Finance,” Chan said. He also added that “the ability to obtain loans and supply Wrapped Bitcoin” in applications on Ethereum is contributing to the growth of movements of BTC to Ethereum.
According to OnChainFX, currently there are bitcoins in Ethereum equivalent to $132 million – this is approximately 0.08% of the market capitalization of the first cryptocurrency.
DeMarco noted that the growth in the use of BTC in Ethereum can have a “synergistic” effect for both blockchains, if we talk about the prospects for their development. Chan agreed with this and stated that for Ethereum, the increase in the value of assets in DeFi applications is “a step towards the development of non-trusting and transparent financial services.”
According to Chang, the benefit for bitcoin is that its owners will be able to earn income and use BTC as collateral. This creates an additional incentive to invest in cryptocurrency. Chan also noted that the use of bitcoin in Ethereum “increases the” bullish ” potential for cryptocurrencies of both networks.”