• The wrapped Bitcoin (WBTC) supply on Ethereum has dropped by around 35% since the LUNA/UST collapse last year.
• At its all-time high (ATH), around 285,000 BTC was locked into the WBTC supply.
• WBTC is an ERC-20 token that allows investors to gain exposure to BTC while leveraging the Ethereum blockchain.
The wrapped Bitcoin (WBTC) supply on Ethereum has seen a dramatic drop in recent months, falling by around 35% since the LUNA/UST collapse last year. According to data from the on-chain analytics firm Glassnode, the WBTC supply on the Ethereum network had reached an all-time high (ATH) of 285,000 BTC last year.
WBTC is an ERC-20 token, meaning it is a “tokenized” version of the Bitcoin cryptocurrency that operates on the Ethereum blockchain. This token allows investors to gain exposure to Bitcoin while leveraging the Ethereum blockchain for faster transactions. The token is backed 1:1 with actual BTC, meaning it always trades at the same price as the crypto.
The growth of the WBTC supply was driven by the bull market throughout 2020 and 2021, but the metric has since slowed down in the first half of 2022 and peaked at 285,000 BTC. Since the LUNA/UST collapse back in May of last year, the WBTC supply has seen a 35% drop, with around 101,550 BTC exiting the network.
The drop in the WBTC supply could be attributed to a number of factors, such as investors cashing out their Bitcoin profits, or simply trading their WBTC tokens for the actual crypto. Additionally, the recent surge in the value of Ethereum could be drawing investors away from WBTC and back to holding Bitcoin directly.
Despite the recent drop, the WBTC supply is still much higher than it was at the start of 2021, when it was around 70,000 BTC. This indicates that there is still a considerable amount of interest in WBTC as an investment option.
Overall, the WBTC supply on Ethereum is still a relatively new concept, but its growth indicates that investors are increasingly looking for ways to gain exposure to Bitcoin while leveraging the Ethereum blockchain. As the crypto market continues to develop, we can expect to see further growth in the WBTC supply in the near future.