After the global financial crisis of 2007-08, many innovations in the financial services industry have taken place. However, none can complete the recent DeFi boom. Wrapped Bitcoin (WBTC) is one such example of an innovative DeFi platform.
Wrapped Bitcoin (WBTC) is a novel way of bringing in bringing liquidity to DeFi. Furthermore, Wrapped Bitcoin (WBTC) is gaining popularity as genuine Bitcoin recovers from its recent crypto crash. WBTC platform essentially converts BTC to Ethereum. Decentralized finance is one of the most common applications for WBTC.
WBTC is a Cryptocurrency that allows Bitcoin investors to participate in the Ethereum Blockchain system. Most DeFi apps are hosted on the Ethereum Blockchain, which provides a wide range of investment opportunities not available on Bitcoin's native platform. People can earn from Bitcoin lending, borrowing, and staking through DeFi apps on Ethereum.
Wrapped Bitcoin has a market cap of $7,184,319,982.89 and is currently selling at roughly $35,840.00 as of June 2021.
Sounds Interesting, yet confusing? Right?
Let's explore the dynamics of WBTC and Wrapped Bitcoin (WBTC) price prediction 2021 and beyond in this article.
Wrapped Bitcoin (WBTC) is an Ethereum-based ERC-20 currency, which was launched in 2019. It symbolizes Bitcoin (BTC) and WBTC's connectivity with Ethereum wallets, dApps, and smart contracts is a significant benefit.
1 Bitcoin can be changed to 1 Wrapped Bitcoin through a WBTC partner, and vice versa. WBTC was intended to allow Bitcoin users to engage in Ethereum-based decentralized finance (DeFi) apps.
WBTC's BTC is openly verifiable due to a "proof of reserve" scheme that validates the 1:1 produced WBTC tokens that are backed by Bitcoin and held by custodians.
The WBTC DAO, which now has over 30 members, is responsible for the upkeep of WBTC. Ren, Kyber, and BitGo were the original founders. On-chain and through the Coinbase platform, Coinbase has put in place measures to maintain a healthy and efficient network.
Minimum and maximum quantities for each coin we enable consumers to send through the Blockchain are included in these safeguards.
When sending money from Coinbase to an external address, the maximum amount is 62.5 WBTC, and the minimum withdrawal amount is 0.00054 WBTC.
I assume that you're already familiar with Bitcoin and are eager to get started with DeFi apps. But there's a snag! Between Bitcoin and Ethereum, there is a lack of a cryptocurrency bridge that holds you back.
Wrapped BTC contributes to the solution of this problem by providing much-needed liquidity to DeFi protocols. It allows users to compare BTC and ETH to stablecoins, despite the fact that Bitcoin isn't always stable. Yeah, volatility cannot restrict liquidity anymore!
When Bitcoin is wrapped, the BitGo Trust stores the cryptocurrency in reserve. The amount of WBTC in circulation is then made public and verification that the underlying asset called Bitcoin is being securely held in custody to act transparently (something that other stablecoins cannot assure at the moment). WBTC can be stored (and unloaded) in wallets like those offered by CoinList.
I know you are wondering, Why aren't we able to simply use Ethereum?
Keep reading to find out!
Nothing prevents you from utilizing ETH as a form of collateral on DeFi platforms. However, as evaluated in US dollars, Bitcoin's market capitalization is far higher, making it critical to expanding the sorts of collateral that DeFi apps can accept, especially if the overall value locked in these protocols approaches new highs.
With rising trade volumes, it's more important than ever to ensure that transactions can be completed quickly and without substantial price variations.
The amount of BTC turned into wrapped tokens is also increasing. The total value locked in WBTC increased by 943 percent from mid-May to mid-August 2020, according to DeFi Pulse.
WBTC allows digital asset owners to experiment with several Blockchains. The Ethereum network, rather than the Bitcoin Blockchain, underpin a substantial portion of the DeFi ecosystem (including DApps). This can be incredibly aggravating for BTC owners, as it means that they will be unable to participate unless they sell their crypto assets or purchase others.
Many DeFi protocols, including Compound, MakerDAO, the Kyber Network, and Dharma, have begun to allow borrowers to utilize WBTC as collateral since the WBTC network began in January 2019.
Crypto loans are typically paid out using the DAI stablecoin on the Ethereum environment, which can then be locked up in a smart contract.
The WBTC DAO is in charge of the Wrapped Bitcoin project. DAO stands for Decentralized Autonomous Organization, just to refresh your memory.
On July 27, 2020, WBTC reached $11,134.15 from $9,328.15 on June 19, 2020. The coin has shown bullish intentions since then. On October 27, 2020, the WBTC price reached $13,663.98, representing a $2529.83 increase in less than six months. By the end of 2020, there was a massive increase in WBTC's price to $29,112.02, representing a 61.754% increase in six months.
This implies that there is a huge demand for a coin that bridges the gap between BTC and ETH, and as a result, the price of the WBTC keeps rising.
Since January, the price of WBTC has increased by 30% to over $36,000. In April 2021, the altcoin hit an all-time high of over $65,000. Since then, it has dropped by 40% from its previous high. If those figures appear to be comparable to those shown on Bitcoin (BTC), it's because they're related.
WBTC might start 2022 with a high price of more than $39,221. If marketers concentrate their efforts on WBTC, the price could skyrocket month after month. It has the potential to attain a high price if it competes well with other currencies. By the end of 2022, WBTC might be valued at $44,427.4.
In January 2023, a 124.85% increase in the WBTC’s price is expected, leading to a WBTC price equal to $80,621.5 4. However, by December 2023, the cryptocurrency will be a massive decrease in the price by 73.96% (approx. $62,737.9).
Based on the price analysis of WBTC in 2021, 2022, and 2023, the price of WBTC is expected to rise to $77,274.98 in December 2024 from $62,737.9 in December 2023, representing a 115.52% price rise.
The year 2025 may witness a massive rise in the price of WBTC. A 173.79% price rise is expected, which may lead to a WBTC price equals $98,167.9. This price rise is attributable to a huge demand for the token like WBTC and the optimistic behavior of stakeholders (governments, investors, hodlers).
May 2025 will witness the highest increase in the price of WBTC to $116,077.55 (a 223.74% price rise). Nonetheless, the price will again fall to $105,538.58 by the end of December 2025.
We've included the most trustworthy Wrapped BTC (WBTC) price predictions from renowned forecasting media outlets below. Though a universal consensus won’t be possible, you can still get an idea if WBTC is worth investing or not.
TradingBeasts is quite pessimistic about WBTC’s price. They project that the WBTC coin's price is expected to reach $44,427.476 by the end of 2022 from $39,221.904 in 2021.
Wrapped BTC (ERC20) can rise from $39976.2 to $93884.1 within a year, according to Wallet Investor. They consider WBTC as a fantastic investment as the potential for long-term profit from WBTC is 134.85%.
The WBTC will trade for $56,407.41 at the start of December 2021, according to Coins Kid, while the Wrapped Bitcoin price prediction for the end of December 2021 is $56,407.41, an 11 percent shift for December 2021. Furthermore, the Wrapped Bitcoin price projection for November 2022 is $89,196.61, a 7% increase from November 2021.
According to DigitalCoin's forecast, the price of Wrapped Bitcoin Cryptocurrency will climb over the next five years $146737.463 from $40060.1. By 2022, it will have risen to $67894.028 and will continue to rise beyond 2022. Wrapped Bitcoin is a beneficial long-term investment, according to their projection. Yeah, that’s a lot of positivity to inject into the DeFi space.
Wrapped Bitcoin's worth follows the price of Bitcoin. As a result, WBTC rises alongside the flagship Bitcoin. Bitcoin has risen substantially from its lows in May 2021, when China prohibited banks from trading it and Tesla stopped taking it as payment.
Following El Salvador's decision to make Bitcoin a legal tender, the flagship Cryptocurrency has made a comeback. As a result, residents and businesses in the small Central American country can now use Bitcoin to buy repay loans, goods, and pay taxes.
The Bitcoin Mining Council's formation has also boosted investor trust in the cryptocurrency by providing justification to criticism of Bitcoin's environmental hazards. This includes proposing a greener version of Bitcoin by shifting ‘proof of work’ to 'proof of stake' algorithms.
Based on such optimistic behavior and price forecasts by the media outlets, we expect that WBTC's price may reach $95,550 by the end of 2021, representing a 160 percent increase over its current value. WBTC is expected to surpass $330,000 in five years, implying an almost 790 percent increase.
So, are you dreaming of becoming a millionaire by investing in WBTC?
Hold on; do not forget that where there is a profit, there is a lot of risks too.
Trust and Centralization are two of the most significant drawbacks of adopting WBTC. BitGo, a centralized corporation, holds all of the BTC supporting WBTC. Because it is the only custodian managing WBTC at the moment, BitGo is seen as a single point of failure. Users must also have complete faith in BitGo to store their BTC safely and honor their redemption requests.
Well, this cannot stop you from acquiring WBTC!
It's worth noting that BitGo is one of the world's most trusted centralized custodians, with one of the most advanced currency security procedures in place. Not to mention that they have digital asset insurance worth up to $100 million in case something goes wrong.
So, WBTC is a sure-shot buy; if you win nothing, you will not end up losing everything!
Wrapped Bitcoin (WBTC) is an ERC-20 token that has the same value as Bitcoin. Because most stablecoins are backed by fiat money, WTBC is a meta Cryptocurrency in this regard. WBTC serves as a link between the two most essential Blockchain pillars, BTC and ETH.
WBTC and its transactions are faster than BTC transactions because it is an ERC-20 token. The most significant benefit of WBTC, however, is its connection with dApps, Ether, and smart contracts.
Wrapped Bitcoin is also supported by around a hundred exchanges, all of which have a high level of trust. It can be traded with a variety of different Cryptocurrencies and kept in any wallet that supports it.
WBTC estimates, as seen in the Wrapped BTC (WBTC) price prediction above, are fairly conflicting. There is no unanimous agreement on whether future WBTC price changes will be high or low. Indeed, future potential growth is contingent on a number of things, including new technology solutions developed by Wrapped BTC projects, project announcements, and the crypto environment in general, legal status, and behavior of hodlers.
Therefore, we would like to remind you that you must conduct your own research before investing in WBTC or any other Crypto asset.
This article should not be construed as providing trading advice as the Cryptocurrency market is characterized by high volatility and erratic moves. Before committing to an investment, each investor should conduct extensive research and become familiar with any local regulations.