Wrapped Bitcoin is now Ethereum’s 6th Largest Token

Wrapped Bitcoin (WBTC) reached all-time highs today in terms of market capitalization and number of tokens.

WBTC is the most popular version of Bitcoin tokenized for use on the Ethereum network. According to the official website, there currently is a record total of 116,885 WBTC, backed by an equal number of BTC held by custodians. The market cap of WBTC now tops $1.58 billion.

This makes WBTC Ethereum’s sixth-largest token by market cap, after Crypto.com Coin (CRO), USD Coin (USDC), Chainlink (LINK), BNB (BNB), and at number one, Tether USD (USDT).

WBTC moved up the rankings in the past week to surpass Compound Dai (cDAI), OKB (OKB) and Bitfinex’s LEO Token (LEO). WBTC is currently the 18th-largest cryptocurrency by market cap overall.

An ERC-20 token backed 1:1 by BTC reserves, Wrapped Bitcoin accounts for 80% percent of the $2 billion worth of BTC on the Ethereum network. To put the growth into perspective, in mid-September, there was only 80,000 tokenized Bitcoin, worth just under $1 billion.

Although recent gains made by BTC also contribute to the rising market cap of WBTC, the primary factor propelling its sudden growth is increasing demand. WBTC is used extensively in DeFi for yield farming, especially among projects with more moderate yields. There is now more than 164,000 BTC locked up in DeFi protocols, which equates to about 0.85% of Bitcoin’s entire circulating supply.

While the first Wrapped Bitcoin was minted back in January 2019, daily trading volume for the token didn’t surpass $1 million until late July of this year. Today, WBTC regularly sees trading volume above $50 million.